Question
A company finds a less expensive way to purchase supplies; instead of shipping everything using overnight delivery, they ship things day air or ground. The
A company finds a less expensive way to purchase supplies; instead of shipping everything using overnight delivery, they ship things day air or ground. The result of this policy is that
A. merchandise inventory and total assets will rise.
B. pretax profit will fall as will merchandise inventory.
C. COGS will fall as will merchandise inventory.
D. COGS will rise along with pretax profit.
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The correct answer is C COGS will fall as will merchandise inventory Explanation When a company swit...Get Instant Access to Expert-Tailored Solutions
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Intermediate Accounting
Authors: Kin Lo, George Fisher
3rd Edition Vol. 1
133865940, 133865943, 978-7300071374
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