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Which of the following items will increase inventory costs for the buyer of goods? Group of answer choices Purchase returns and allowances granted by the seller. Discount received taken by the purchaser. Freight charges paid by the purchaser. Freight charges paid by the seller.

Question

Which of the following items will increase inventory costs for the buyer of goods? Group of answer choices

Purchase returns and allowances granted by the seller.

Discount received taken by the purchaser.

Freight charges paid by the purchaser.

Freight charges paid by the seller.

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Solution

The item that will increase inventory costs for the buyer of goods is:

Freight charges paid by the purchaser.

Here's why:

  1. Purchase returns and allowances granted by the seller: This will decrease the inventory cost for the buyer, not increase it. When the seller grants returns or allowances, it means the buyer is paying less for the goods.

  2. Discount received taken by the purchaser: This also decreases the inventory cost for the buyer. If the buyer receives a discount, they are paying less for the goods.

  3. Freight charges paid by the purchaser: This will increase the inventory cost for the buyer. Freight charges are the cost of transporting the goods from the seller to the buyer. If the buyer is paying these charges, it adds to the total cost of the goods.

  4. Freight charges paid by the seller: This will not affect the inventory cost for the buyer. If the seller is paying the freight charges, it does not add to the cost of the goods for the buyer.

This problem has been solved

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