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For Each Cost Identify Which Accounting Treatment Would Most Likely

Question 90

Matching

For each cost identify which accounting treatment would most likely be used in accounting for the cost. You may use each choice more than once or not at all.

Premises:

Responses:

Cash price of goods purchased for resale

Added to cost of inventory

Transportation cost of goods shipped to customers

Deducted from cost of inventory

Transportation cost of goods shipped from suppliers FOB shipping point

Not part of cost of inventory

Return of inventory to supplier

Transportation cost of goods being shipped to consignee

Assembly costs of products which will be sold to customers

Insurance cost paid while inventory is in transit from suppliers

Excise, sales, use, value added, and other fees and taxes paid on the purchase of inventory

Premises:

Cash price of goods purchased for resale

Transportation cost of goods shipped to customers

Transportation cost of goods shipped from suppliers FOB shipping point

Return of inventory to supplier

Transportation cost of goods being shipped to consignee

Assembly costs of products which will be sold to customers

Insurance cost paid while inventory is in transit from suppliers

Excise, sales, use, value added, and other fees and taxes paid on the purchase of inventory

Responses:

Added to cost of inventory

Deducted from cost of inventory

Not part of cost of inventory

Correct Answer:

Premises:

Responses:

Cash price of goods purchased for resale

Transportation cost of goods shipped to customers

Transportation cost of goods shipped from suppliers FOB shipping point

Return of inventory to supplier

Transportation cost of goods being shipped to consignee

Assembly costs of products which will be sold to customers

Insurance cost paid while inventory is in transit from suppliers

Excise, sales, use, value added, and other fees and taxes paid on the purchase of inventory