a-company-purchases-inventory-for-3000-and-incurs-a-freight-cost-of-150-under-fo

Question

A company purchases inventory for $3,000 and incurs a freight cost of $150 under FOB Shipping Point terms. What is the correct journal entry?

Accepted Answer

Debit Inventory $3,150; Credit Accounts Payable $3,150

Answer

Debit Inventory $3,000; Debit Freight Expense $150; Credit Accounts Payable $3,150

Answer

Debit Freight Expense $150; Credit Cash $150

Answer

Debit Inventory $3,000; Credit Accounts Payable $3,000

A company purchases inventory for \$3,000 and incurs a freight cost of \$150 under FOB Shipping Point terms. What is the correct journal entry?