When a Perpetual System Is Used and Transportation Cost Is

Multiple Choice

When a perpetual system is used and transportation cost is incurred to obtain inventory,the transportation cost is:

A) added to Inventory.
B) reported as Selling,General & Administrative Expense on the income statement.
C) reported as a contra-account that is subtracted from sales revenue when determining net sales.
D) deducted from the Cost of Goods Sold when determining gross profit.