Which of the following items will increase inventoriable costs for the buyer of goods?
A) Purchase returns and allowances granted by the seller
B) Purchase discounts taken by the purchaser
C) Freight charges paid by the seller
D) Freight charges paid by the purchaser

Question

Quizplus · Accepted Answer

When the purchaser pays for the freight charges, it increases the cost of the goods being purchased and therefore increases the inventoriable costs for the buyer. Purchase returns and allowances granted by the seller decrease the cost of goods sold and therefore decrease inventoriable costs. Purchase discounts taken by the purchaser also decrease the cost of goods sold and decrease inventoriable costs. Freight charges paid by the seller do not affect the cost of the goods being purchased and therefore do not affect inventoriable costs for the buyer.

Which of the Following Items Will Increase Inventoriable Costs for the Buyer