Blue Mart operates a large chain of retail stores.The company has four warehouses that are located in various parts of the country.The cost of operating the warehouses must be capitalized and becomes a cost of inventory that is not deducted until the goods are sold.

Question

Quizplus · Accepted Answer

The cost of operating the warehouses is considered a cost of inventory and must be capitalized, meaning it becomes a part of the cost of goods sold when the goods are sold. Therefore, it cannot be deducted until the goods are sold.

Blue Mart Operates a Large Chain of Retail Stores