Question

Transportation costs for inventory purchase, FOB shipping point, should be entered as follows: a. Debit Cost of Goods Sold for the purchaser. b. Debit Delivery Expense for the purchaser. c. Debit Inventory for the purchaser. d. Debit Transportation Out for the purchaser.

Answer 1

Transportation costs for inventory purchase, FOB shipping point, should be entered as debit Delivery Expense for the purchaser.

Step-by-step explanation:

The transportation costs for inventory purchase, FOB shipping point, should be entered as debit Delivery Expense for the purchaser. This is because FOB shipping point means that the buyer assumes responsibility for the goods once they are shipped, which includes transportation costs. By debiting the Delivery Expense account, the purchaser can accurately record and track the costs associated with transporting the inventory.