In a periodic inventory system, when the buyer pays for freight costs, this entails
A) a debit to the Freight In account.
B) a debit to the Purchases account.
C) a debit to the Inventory account.
D) a debit to the Sales account.

Question

Quizplus · Accepted Answer

In a periodic inventory system, when the buyer pays for freight costs, it is common practice to debit the Freight In account. This account is used to accumulate all freight charges associated with the acquisition of inventory, which are then included in the cost of goods sold at the end of the accounting period.

In a Periodic Inventory System, When the Buyer Pays for Freight