Under a periodic system, the account that is increased for freight costs on goods received from the vendor is called:

Question

Quizplus · Accepted Answer

The account that is increased for freight costs on goods received from the vendor is Transportation-In. This account is used to record the cost of shipping and handling of goods purchased from suppliers. It is an expense account and is included in the cost of the purchased goods which are added to Merchandise Inventory. Therefore, option A is incorrect. Option B is incorrect because Cost of Goods Sold is increased when goods are sold to customers, not when they are purchased. Option C is Transportation-Out, which is the account used to record the cost of shipping and handling of goods sold to customers, not when they are purchased.

Under a Periodic System, the Account That Is Increased for Freight