Augustus, Inc buys designer clothing to sell in its retail stores. Since much of the merchandise comes from New York and Europe, Augustus must pay freight charges to get the merchandise shipped in. Which of the following statements must be true?

A) Transportation-in, paid by Augustus, is added to the inventory account under the periodic system.
B) Transportation-in, paid by Augustus, is subtracted from purchases under the periodic system.
C) Freight charges are only paid by a buyer in a periodic system.
D) Transportation-in is included in the total cost of purchases used to determine cost of goods sold in a periodic system.

D