Fulton Company uses the periodic inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Fulton paid $750 cash for the shipping charges.How would the company record this transaction?
A)Debit Merchandise Inventory for $750 and credit Cash for $750.
B)Debit Transportation-In for $750 and credit Cash for $750.
C)Debit Merchandise Inventory for $750 and credit Accounts Payable for $750.
D)Debit Transportation-In for $750 and credit Accounts Payable for $750.
E)Debit Delivery Expense for $750 and credit Cash for $750.

Question

Quizplus · Accepted Answer

Under the periodic inventory system, transportation costs for merchandise purchased FOB destination are recorded as a debit to Transportation-In and a credit to Cash.

Fulton Company Uses the Periodic Inventory Method