Which of the following is not included in the purchase cost of merchandise inventory?
A) Purchase discounts
B) Overhead costs
C) Freight-in costs
D) Purchase returns and allowances

Question

Quizplus · Accepted Answer

Overhead costs, such as rent and salaries, are not included in the purchase cost of merchandise inventory. The purchase cost of merchandise inventory includes only the cost of the actual goods purchased, along with any additional costs directly related to acquiring and transporting the goods, such as freight-in costs and purchase discounts. Purchase returns and allowances are deducted from the purchase cost to determine the net cost of the inventory.

Which of the Following Is Not Included in the Purchase