Question

Jax Company uses a perpetual inventory system and on November 30 purchased merchandise for which it must pay the shipping charges. Which of the following is one part of the required journal entry when Jax pays the shipping charges of $200? a). a debit to freight-out for $200 b). a debit to inventory for $200 c). A debit to Delivery Expense for $200 d). A debit to cash for $200

Answer 1

b). a debit to inventory for $200

Step-by-step explanation:

The journal entry is shown below:

Inventory A/c Dr $200

To Cash A/c $200

(Being the shipping charges is paid for cash)

Under the perpetual inventory account, all the expenses which are incurred to bring the product to the destination have come under the inventory account. So, we debited the inventory account and credited the cash account