Freight in and Purchases Returns and Allowances Are Deducted from Purchases

question 55

True/False

Freight In and Purchases Returns and Allowances are deducted from Purchases to determine the net delivered cost of purchases.

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Definitions:

2/10, n/30

A common credit term indicating that a buyer can take a 2% discount on the invoice price if payment is made within 10 days; otherwise, the net amount is due in 30 days.

FOB Destination

A shipping term indicating that the seller bears freight charges and remains responsible for the goods until they are delivered to the buyer's location.

Freight Costs

Expenses incurred by a company to transport goods from one place to another, such as shipping charges for receiving or sending out inventory.

Trade Discount

A reduction in the list price granted by a supplier to a buyer, often based on the volume of goods purchased or to maintain a competitive advantage.