Freight charges on merchandise purchases should be debited to:
A)the Accounts Payable account.
B)the Purchases account.
C)the creditor's account in the subsidiary ledger.
D)the Freight In account.

Question

Quizplus · Accepted Answer

Freight charges on merchandise purchases should be debited to the Freight In account, as this account tracks the cost of shipping and receiving goods bought by the company. This account is part of the cost of goods sold calculation and is included in the inventory costs. It is not appropriate to debit the Accounts Payable account, Purchases account, or the creditor's account in the subsidiary ledger, as they relate to the purchase price of the merchandise, not the related freight charges.

Freight Charges on Merchandise Purchases Should Be Debited To