Which of the Following Is the Correct Journal Entry for Freight

question 179

Multiple Choice

Which of the following is the correct journal entry for freight paid on goods purchased by a merchandiser using the periodic inventory system?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Purchases } & \chi \chi & \\
• \hline \text { Accounts Payable } & & \chi \chi \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Merchandise Inventory } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Freight In } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Freight Expense } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]

Understand the protection methods for intellectual property.

Analyze the value and types of inventory in business purchases.

Recognize the financial mechanisms available for purchasing a business.

Appreciate the unique dynamics and considerations in family-owned businesses.

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Definitions:

Current Liabilities

Financial obligations a company is required to pay within one year or within the normal operating cycle.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time, indicating its profitability.

Debits

Entries on the left side of a double-entry accounting system that increase assets or expenses or decrease liabilities, equity, and income.