Monday, December 12, 2011

What do i debit when billed a seperate bill for freight charges?

Im having trouble with this part of my homework. i recieve a seperate bill for freight charges ($314) and i was wondering if i debit merchendise inventory or transportion-in. My freind told me it was Cost of goods sold, but it doesn't make sense since you haven't sold anything. Please help.





Also is this journal entry correct? I recieved a billed and issued a check for transportation fees.


Debit-transportation-in


credit-cash|||Yes, that is correct - some large companies that carry a large inventory will add the freight


directly to the particular item as a cost of the item - most smaller companies with only


a few inventory products will use the freight in method - either way is totally correct|||debit transport in /other is correct

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