Multiple choice

Packing expenses on sales must be

  1. added to cost of goods manufactured

  2. added to operating cost

  3. added to cost of goods sold

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 Packing expense on sales must be added to the operating cost as it is an indirect expense. It is the expense incurred for distribution of goods, which is an indirect expense. It is to be shown in the debit side, of the profit and loss account.

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