1. Purchase returns and allowances and purchase discounts reduce the cost of good sold? True or False? Why?

2. Only Freight-Out costs associated with merchandise inventory are included in cost of good sold? True or False? Why?

3. The cost of the inventory is the net amount of the purchases? True or False? Why?

4. A purchase return is a decrease in the cost of purchases because the purchaser returned goods to the supplier? True or False?

5. Inventory is present on the balance sheet at the selling price of the item. True or False?

6. The merchandise inventory is reported as an asset until it is sold. True or False?