Computers For You is a retailer specializing in selling computers and related equipment. During 2019, Computers For You sells €200,000 of merchandise to Sandcastles, Inc. Computers For You incurs €24,000 of freight costs associated with these sales. Which of the following is true regarding how this €24,000 is treated on the financial statements?
A) Computers For You will report the €24,000 as part of merchandise inventory on the statement of financial position.
B) Sandcastles, Inc. will report the €24,000 as part of merchandise inventory on the statement of financial position.
C) Computers For You will report the €24,000 as part of operating expenses on the income statement.
D) Sandcastles, Inc. will report the €24,000 as an accounts receivable on the statement of financial position.
Correct Answer:
Verified
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