Choice "B" is correct. General and administrative expenses include:
Accounting and legal
$ 25,000
Officers salaries
150,000
Insurance
85,000
Total
$ 260,000
Freight-in is part of cost of sales; freight-out is a selling expense; and sales salaries are selling expenses.Choice "a" is incorrect. Freight-in is part of cost of inventory; freight-out is a selling expense; and sales salaries are selling expenses.
Choice "d" is incorrect. Freight-in is part of cost of inventory; freight-out is a selling expense; and sales salaries are selling expenses.
Choice "c" is incorrect. Freight-in is part of cost of inventory; freight-out is a selling expense; and sales salaries are selling expenses.
