Freight costs incurred by the seller to ship merchandise to the purchaser are accounted for by the seller as part of inventory on the statement of financial position.

Question

Quizplus · Accepted Answer

Freight costs incurred by the seller to ship merchandise to the purchaser are typically recorded as a selling expense, not as part of inventory. Inventory costs include costs that are directly related to bringing the inventory to its present location and condition, such as purchase price, freight-in, and handling costs, not the costs of selling or shipping the product to the customer.

Freight Costs Incurred by the Seller to Ship Merchandise to the Purchaser