Question Details

If both purchases and ending inventory are overstated by the same amount, net income is not affected 



TRUE OR FALSE:
1.	Companies must allocate the cost of all the goods available for sale (or use) between the income statement and the statement of financial position.

	2.	When using a perpetual inventory system, freight charges on goods purchased are debited to Freight-In.

	3.	If a supplier ships goods f.o.b. destination, title passes to the buyer when the supplier delivers the goods to the common carrier.

	4.	If both purchases and ending inventory are overstated by the same amount, net income is not affected . 

	5.	Freight charges on goods purchased are considered a period cost and therefore are not part of the cost of the inventory.


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