The journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid by their supplier and added to the invoice is:
A)debit Accounts Payable $2,875, debit Freight in $125; credit Purchases $2,750
B)debit Accounts Receivable $2,875; credit Sales $2,875
C)debit Purchases $2,750, debit Freight In $125; credit Accounts Payable $2,875
D)debit Purchases $2,750; credit Accounts Payable $2,750

Question

Quizplus · Accepted Answer

The purchase of merchandise on account is recorded with a debit to Purchases and a credit to Accounts Payable. The freight in cost of $125 is also recorded as a debit to Freight In and a credit to Accounts Payable. Therefore, option C is correct. Option A is incorrect because it debits Accounts Payable instead of crediting it. Option B is incorrect as it records a sale rather than purchase. Option D is incorrect because it does not record the freight in cost.

The Journal Entry to Record the Purchase of Merchandise on Account