Chamberlain Company buys designer clothing to sell in its retail stores.Since much of the merchandise comes from Dallas and Europe, Chamberlain Company must pay freight charges to get the merchandise shipped in.Which statement is true?

Question

Quizplus · Accepted Answer

In a periodic system, transportation-in is considered part of the cost of goods purchased and is therefore added to net purchases to determine the cost of goods purchased. This is because the buyer does not track inventory levels in real-time and instead waits until the end of a period to calculate the cost of goods sold.

Chamberlain Company Buys Designer Clothing to Sell in Its Retail