If the seller delivers products FOB destination, what entry will it record?
A) Freight Out Cash
B) Freight In Cash
C) Cost of Goods Sold Cash
D) Inventory Cash

Question

Quizplus · Accepted Answer

When a seller delivers products FOB (Free On Board) destination, it means the seller is responsible for the goods until they are delivered to the buyer's location. The cost associated with transporting the goods to the buyer is considered a selling expense, often recorded as "Freight Out" or "Delivery Expense." Therefore, when the seller pays for this delivery cost, it records the expense by debiting "Freight Out" (or a similar account) and crediting "Cash" to reflect the payment of the transportation cost.

If the Seller Delivers Products FOB Destination, What Entry Will