Bookkeeping NC III Practice Questions - TESDA Bookkeeping NC III Competency Assessment Exam

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Under the perpetual inventory system, a business purchases merchandise on credit with terms FOB shipping point. The buyer pays the freight charges of ₱2,500 in cash. What is the correct journal entry to record the freight payment?

Debit Freight-In ₱2,500; Credit Cash ₱2,500 Debit Merchandise Inventory ₱2,500; Credit Cash ₱2,500 Debit Freight-Out ₱2,500; Credit Cash ₱2,500 Debit Merchandise Inventory ₱2,500; Credit Accounts Payable ₱2,500

Correct Answer:

Debit Merchandise Inventory ₱2,500; Credit Cash ₱2,500

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