Question

To record payment of freight on goods sold (seller pays for freight costs):

a) Debit Freight Expense, Credit Cash
b) Credit Freight Expense, Debit Accounts Receivable
c) Debit Freight Income, Credit Cash
d) Credit Accounts Payable, Debit Freight Expense

Answer 1

The correct way to record the payment of freight on goods sold by the seller is to debit Freight Expense and credit Cash, as this reflects the additional expense and the outflow of cash.

Step-by-step explanation:

To record the payment of freight on goods sold, where the seller is responsible for the freight costs, you should debit Freight Expense and credit Cash.

This means that the correct journal entry is option a) Debit Freight Expense, Credit Cash.

This is because the freight cost represents an additional expense incurred by the seller to deliver the goods. Hence, increasing the expense account (Freight Expense) and decreasing the asset account (Cash) reflects this outflow of economic benefit.