Financial Accounting[4 marks]What determines the proper account classification of freight chargeson new equipment purchases?a) Company's shipping department policyb) Whether freight is prepaid or collectc) Nature of the equipment purchasedd) Capitalize as part of equipment cost

a) Company's shipping department policyThis is incorrect.There is no internal shipping policy of the…

Answered: Financial Accounting [4 marks] What…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 18Q: Which statement and where on the statement is freight-out recorded? Why is it recorded there?

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Similar questions

Who bears the freight when the terms of sale are (a) FOB shipping point, (b) FOB destination?
Which statement and where on the statement is freight-out recorded? Why is it recorded there?
When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with which of the following entries (assuming the exchange was considered to have commercial substance)? a.debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Exchange of Machinery b.debit Cash and Machinery; credit Accumulated Depreciation and Machinery c.debit Machinery and Accumulated Depreciation; credit Machinery and Cash d.debit Cash and Machinery; credit Accumulated Depreciation
Shipping cost for goods sold to customers, in transit, shipped f.o.b. point of shipment be classified as a current liability? True O False
Which of the following statements regarding freight costs is true? a. FOB destination means that transportation charges are paid by the buyer. Ob. Under FOB shipping point, the buyer owns the inventory as soon as it is shipped and should count it in inventory. c. When the terms are FOB shipping point, the freight-in account is not used in recording the purchase. Od. Under FOB destination, the buyer owns the inventory as soon as it is shipped and should count it in inventory.
Given the following information for C & J, Inc. identify where the items will be classified (asset or expense, or not reported) and on which financial statement the items will reported (income statement, balance sheet, or N/A). Cost Item Research and Development Prepaid Expenses Cost of Goods Sold Selling, General and Administrative Inventory Opportunity Cost Classification Asset Expense Not Reported Financial Statement
Freight costs paid by a seller on merchandise sold to customers will cause an increase to a contra-revenue account of the seller. to the cost of goods sold of the seller. in operating expenses for the seller. in the selling expense of the buyer.
None
Goods or products a company owns and expects to sell to its customers A) Sales Merchandise Inventory C. Cost of goods sold Purchases
Dividing cost of goods sold by the average of merchandise inventory is the calculation for the a.accounts receivable turnover. b.merchandise inventory turnover. c.working capital turnover. d.plant and equipment turnover.
How do you calculate freight-in
How can I find a company's: Total Asset Turnover inventory Turnover Measures Accounts Receivable Turnover

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Financial Accounting [4 marks] What determines the proper account classification of freight charges on new equipment purchases? a) Company's shipping department policy b) Whether freight is prepaid or collect c) Nature of the equipment purchased d) Capitalize as part of equipment cost