ACC 304 Experience Tradition / tutorialrank.com ACC 304 Experience Tradition / tutorialrank.com | Page 48

2 . Both merchandising and manufacturing companies normally have multiple inventory accounts .
3 . When using a perpetual inventory system , freight charges on goods purchased are debited to Freight-In .
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 .