Which of the following is the correct journal entry for freight paid on goods purchased by a merchandiser using the periodic inventory system?
A) $\begin{array}{|l|l|l|}
\hline\text { Purchases } & \text { XX } \
\hline \text { Accounts Payable } & & \text { XX } \
\hline
\end{array}$
B) $\begin{array}{|l|l|l|}
\hline \text { Merchandise Inventory } & \text { XX } \
\hline \text { Cash } && \text { XX } \
\hline
\end{array}$
C) $\begin{array}{|l|l|l|}
\hline\text { Freight In } & \text { XX } \
\hline \text { Cash } && \text { XX }\
\hline
\end{array}$
D) $\begin{array}{|l|l|l|}
\hline\text { Freight Expense } & \text { XX } \
\hline \text { Cash } && \text { XX } \
\hline
\end{array}$

Question

Which of the following is the correct journal entry for freight paid on goods purchased by a merchandiser using the periodic inventory system?
A) $\begin{array}{|l|l|l|}
\hline\text { Purchases } & \text { XX } \
\hline \text { Accounts Payable } & & \text { XX } \
\hline
\end{array}$
B) $\begin{array}{|l|l|l|}
\hline \text { Merchandise Inventory } & \text { XX } \
\hline \text { Cash } && \text { XX } \
\hline 
\end{array}$
C) $\begin{array}{|l|l|l|}
\hline\text { Freight In } & \text { XX } \
\hline \text { Cash } && \text { XX }\
\hline
\end{array}$
D) $\begin{array}{|l|l|l|}
\hline\text { Freight Expense } & \text { XX } \
\hline \text { Cash } && \text { XX } \
\hline
\end{array}$

Quizplus · Accepted Answer

Under the periodic inventory system, freight costs associated with the purchase of goods are recorded in a "Freight In" account, not directly to the Merchandise Inventory account. This cost is later factored into the cost of goods sold at the time of inventory calculation.

Which of the Following Is the Correct Journal Entry for Freight