Global Care uses a perpetual inventory system and purchased wheelchairs under terms FOB destination. The freight charges associated with the wheelchairs will be added to the inventory account on Global Care's statement of financial position.

Question

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In a perpetual inventory system, freight charges under FOB destination terms are not added to the inventory account because the seller is responsible for the freight costs until the goods reach the buyer's location.

Global Care Uses a Perpetual Inventory System and Purchased Wheelchairs