In calculating cost of goods sold, Meg Malloy noticed that her accounting software included the freight charges on purchased goods. Your response to this procedure is:
A)Freight charges are a legitimate part of cost of goods sold.
B)Freight charges should be subtracted as part of general expenses.
C)Freight charges cannot be deducted as an expense on the income statement.
D)Freight charges are part of revenues.

Question

Quizplus · Accepted Answer

Freight charges are a legitimate part of cost of goods sold as they directly relate to the purchase of goods and bringing them to the company's location. Therefore, they should be included in the calculation of cost of goods sold.

In Calculating Cost of Goods Sold, Meg Malloy Noticed That