6. The Smither Smith Company purchased $10,00 of merchandise from the ForLess Co

Question

6. The Smither Smith Company purchased $10,00 of merchandise from the ForLess Company. Smither Smith also paid $500 for freight costs to have the goods shipped to its location. Which of the following statements regarding the necessary entries for the transactions is true? Smither Smith uses the perpetual inventory system.

a. Total debits to the inventory account would be $10,000.

b. Total debits to the invertory account would be $10,500.

c. Transportation Expense would be debited for $500.

d. Answers A and C are both true.

Explanation / Answer

C

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