a-company-purchases-goods-under-fob-shipping-point-terms-the-goods-cost-1000-and

Question

A company purchases goods under FOB Shipping Point terms. The goods cost $1,000, and the freight cost is $50. How should the company record the freight cost?

Accepted Answer

Debit Inventory $50; Credit Accounts Payable $50

Answer

Debit Inventory $1,050; Credit Accounts Payable $1,050

Answer

Debit Freight Expense $50; Credit Cash $50

Answer

Debit Freight Expense $50; Credit Inventory $50

A company purchases goods under FOB Shipping Point terms. The goods cost \$1,000, and the freight cost is \$50. How should the company record the freight cost?