A company using a perpetual inventory system treats transportation-out as a selling and administrative expense.

Question

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In a perpetual inventory system, transportation-out is typically considered a selling and administrative expense rather than a cost of goods sold expense. This is because transportation-out pertains to the delivery of goods to customers, which is considered part of the selling process, rather than the production or acquisition of goods, which would be included in cost of goods sold.

A Company Using a Perpetual Inventory System Treats Transportation-Out as a Selling