If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the carrier will bear the freight cost. ● Inventory account will be increased. seller will bear the freight cost. ● Inventory account will not be affected.

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the carrier will bear the freight cost. ● Inventory account will be increased. seller will bear the freight cost. ● Inventory account will not be affected.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 5A

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Question

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the
carrier will bear the freight cost.
● Inventory account will be increased.
O O O
seller will bear the freight cost.
Inventory account will not be affected.

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Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
Under the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?
Which of the following is not a characteristic of FOB Destination? A. The seller pays for shipping. B. The seller owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
What is the difference in reporting requirements for customer-returned merchandise in sellable condition under a perpetual inventory system versus a periodic inventory system?
In perpetual method, _______________ will be credited if an item bought will be returned. Cost of sales is computed as Cost of Goods Available for Sale _____________ ending inventory. Sales discount will be ________________ from Gross Sales. When _______________ method of reporting inventory is used, merchandise account will be debited when freight in was paid.
When the buyer pays the freight costs, the entry to record the payment under a perpetual inventory system would include a debit to _______. Question content area bottom Part 1 A. Freight In B. Inventory C. Purchases Discounts D. Delivery Expense
When goods are shipped FOB destination and the seller pays the freight charges, the buyer a.does not take a discount b.journalizes a reimbursement to the seller c.makes no journal entry for the freight d.journalizes a reduction for the cost of the merchandise
The buyer should be responsible for the freight (legally) but the seller paid for it A. FOB shipping point, freight prepaid B. FOB shipping point, freight collect C. FOB destination, freight prepaid D. FOB destination, freight collect
When merchandise was shipped by the consignor to the consignee and freight on shipment was paid by the latter, then: Sale is properly recognized by the consignor. The cost per unit of the merchandise will eventually increase. Freight in is properly recognized by the consignee. The consignee, upon receipt of the goods, is already entitled for commissions income. The risk and reward over the merchandise is transferred to the recipient of goods.
Assume that a perpetual inventory system using the NET METHOD is in use. Which of the following statements regarding the journal entries prepared is correct? A) When a customer returns inventory, the seller debits Customer Refunds Payable. B) Shipping costs associated with sales with terms FOB, destination should be included in Cost of Merchandise Inventory. C) When a company receives payment from a customer for a sale, Cash is debited and Accounts Payable is credited. D) When a company sells merchandise with terms 2/10, n 30, the company will credit Merchandise Inventory for the amount of the discount of 2 percent of sales. Why is the answer A and not D?
If NetSolutions purchases merchandise inventory and pays the shipping or freight costs, the shipping terms are called ___________________. Group of answer choices FOB (free on board) destination FOB (free on board) merchandise FOB (free on board) shipping FOB (free on board) sales
7.Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account? a. Freight Expense b. Freight-Out c. Freight-In d. Inventory