Which of the following statements is correct?
A)Freight In is subtracted from Purchases to arrive at delivered cost of purchases.
B)Freight charges that are listed on the invoice received from a supplier are not part of the total credit to Accounts Payable to record the credit purchase.
C)Another name that may be used for the Freight In account is "Transportation In."
D)The Freight In account is subtracted from Sales to get Net Sales.

Question

Quizplus · Accepted Answer

Option A is incorrect because Freight in is added to purchases to arrive at delivered cost of purchases. Option B is incorrect because freight charges that are listed on the invoice received from a supplier are part of the total credit to Accounts Payable to record the credit purchase. Option D is incorrect because the freight in account is not subtracted from sales to get net sales. Hence, the correct statement is that freight in account is also known as transportation in, which is option C.

Which of the Following Statements Is Correct