Question Details

Interest costs incurred to manufacture large quantities of inventory 



TRUE OR FALSE:
1.	Purchase Discounts Lost is a financial expense and is reported in the “other income and expense” section of the income statement.

	2.	Interest costs incurred to manufacture large quantities of inventory that are produced routinely should be capitalized.

	3.	A trade discount that is granted as an incentive for a first-time customer or as a reward for large order should be accounted for by the purchaser as revenue.

	4.	Freight costs incurred by the seller to ship merchandise to the purchaser are accounted for by the seller as part of inventory on the statement of financial position.

	5.	Abnormal freight costs are not included on the statement of financial position as part of the cost of inventory.




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