Asked by Ashley Tyler on Jul 17, 2024
Verified
Freight costs incurred on incoming merchandise are an operating expense to the buyer.
Freight Costs
Expenses associated with transporting goods from one location to another.
Operating Expense
Relates to the costs associated with the day-to-day activities of running a business, excluding direct production costs.
Incoming Merchandise
Refers to items or goods received by a business for sale or use in production.
- Acquire knowledge on the economic impact and record-keeping for shipping expenses across different delivery terms (FOB shipping point vs. destination).
Verified Answer
RP
Renata PereiraJul 19, 2024
Final Answer :
False
Explanation :
Freight costs incurred on incoming merchandise are considered part of the cost of the merchandise and are included in inventory costs until the merchandise is sold, at which point they become part of the cost of goods sold.
Learning Objectives
- Acquire knowledge on the economic impact and record-keeping for shipping expenses across different delivery terms (FOB shipping point vs. destination).