What are expenses like sales salaries expense, advertising expense, etc. called that are incurred directly in the selling of merchandise inventory? Group of answer choices administrative expenses other expenses selling expenses cost of goods sold

What are expenses like sales salaries expense, advertising expense, etc. called that are incurred directly in the selling of merchandise inventory? Group of answer choices administrative expenses other expenses selling expenses cost of goods sold

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Description: What are expenses like sales salaries expense, advertising expense, etc. called that are incurred directly in the selling of merchandise inventory?Group of answer choicesadministrative expensesother expensesselling expensescost of goods sold

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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What are expenses like sales salaries expense, advertising expense, etc. called that are incurred directly in the selling of merchandise inventory?

Group of answer choices

administrative expenses

other expenses

selling expenses

cost of goods sold

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A merchandising business purchases goods for resale. A merchandiser makes a profit by selling goods at a price higher than the cost of the goods sold. While the underlying business transaction is straightforward, determining of the cost of the merchandise sold often requires an inventory cost flow assumption when similar units are purchased at different units costs during the period. Identify cost flow assumptions to their description: Cost Flow Assumption (choose between FIFO,LIFO, weighted average, or specific identication) Description Cost flow is the reverse order in which the costs were incurred. Cost flow is the order in which the costs were incurred. Cost flow is an average of the purchase costs. Unit cost is identified with a specific purchase Often, specification identification may not be practical, so one of the other three cost flow assumptions is assumed. The cost flow assumption can be applied under either the perpetual or periodic inventory system.
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