If a purchaser using a perpetual inventory system pays freight costs, then the
A)Inventory account is increased.
B)Inventory account is not affected.
C)Freight Out account is increased.
D)Freight In account is increased.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, when a purchaser pays freight costs, it is typically added to the cost of inventory, thereby increasing the Inventory account. This reflects the principle that inventory costs include all costs necessary to bring the goods to their current location and condition, ready for sale.

If a Purchaser Using a Perpetual Inventory System Pays Freight