a-company-purchases-inventory-under-fob-shipping-point-terms-and-incurs-200-in-f

Question

A company purchases inventory under FOB Shipping Point terms and incurs $200 in freight costs. How should these costs be recorded?

Accepted Answer

Debit Freight In $200; Credit Accounts Payable $200.

Answer

Debit Purchases $200; Credit Cash $200.

Answer

Debit Inventory $200; Credit Cash $200.

Answer

Debit Freight Expense $200; Credit Accounts Payable $200.

A company purchases inventory under FOB Shipping Point terms and incurs \$200 in freight costs. How should these costs be recorded?