JournaldrillFreight on purchases
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Ridgeway Hardware bought merchandise with terms FOB shipping point. When the goods arrive, it pays the trucking company $360 in cash for the shipping. Ridgeway uses a perpetual inventory system.
What this exercise teaches
Under FOB shipping point the buyer pays freight, and freight-in is a cost of getting inventory ready for sale, so it is added to Inventory. Cash is credited for the $360 paid. Delivery Expense is used for freight-out on goods shipped to customers, not for freight-in.
A hint if you get stuck
Shipping paid by the buyer to get goods in the door is part of what the goods cost.
This exercise is part of Pro
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