True or False

1.Cost of goods sold is considered a product cost.

2.When merchandise inventory is purchased for cash, the transaction is recorded as an expense.

3. The freight terms FOB shipping point increase the cost of inventory to the buyer.

4. When transportation-in cost is incurred, the balance in the inventory account increases.

5. In a perpetual inventory system, a sales discount is recorded as a reduction of sales revenue.

6. A single-step income statement shows the computation of gross margin.

7. The purpose of giving a cash discount to customers purchasing on account is so they remain customers

8. The cost of merchandise inventory is increased when the buyer receives an "allowance" for damaged item.

9. If a merchandising company uses the perpetual inventory system, the company does not need to do phase of the inventory at the end of its accounting period.

10. Transportation-out cost is a part of selling and administrative costs.