The amount recorded for merchandise inventory includes all of the following except:
A) Purchase discounts.
B) Returns and allowances.
C) Freight costs paid by the buyer.
D) Freight costs paid by the seller.
E) Trade discounts.

Question

Quizplus · Accepted Answer

Freight costs paid by the seller are not included in the merchandise inventory cost from the buyer's perspective. Inventory costs typically include purchase price, freight-in (costs paid by the buyer for shipping), and any additional costs directly related to bringing the goods to a saleable condition, but not freight costs paid by the seller.

The Amount Recorded for Merchandise Inventory Includes All of the Following