If the Shipping Terms Are FOB Shipping Point and the Freight

question 113

Multiple Choice

If the shipping terms are FOB shipping point and the freight bill is $200, the purchaser, using a periodic inventory system would record payment of the freight with a debit to:

• A)Inventory and credit to Cash for $200.
• B)Freight In and a credit to Cash for $200.
• C)Inventory and credit to Purchases Discounts for $200.
• D)Purchases Discounts and credit to Inventory for $200.

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Definitions:

Empiricism

Use of objective observations to answer a question about the nature of behavior.

Empirical Evidence

Evidence that is based on observation, experience, or experiment, rather than theory or pure logic.

Intuition

The ability to understand or know something immediately, without the need for conscious reasoning.

Availability

The degree to which resources, services, or supports are accessible and obtainable when needed.