4 . If a supplier ships goods f . o . b . destination , title passes to the buyer when the supplier delivers the goods to the common carrier .
5 . If ending inventory is understated , then net income is understated .
6 . If both purchases and ending inventory are overstated by the same amount , net income is not affected .
7 . Freight charges on goods purchased are considered a period cost and therefore are not part of the cost of the inventory .
8 . Purchase Discounts Lost is a financial expense and is reported in the ― other expenses and losses ‖ section of the income statement .
9 . The cost flow assumption adopted must be consistent with the physical movement of the goods .