Asked by Vansh Arora on Jun 19, 2024

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Freight costs paid by a seller on merchandise sold to customers will cause an increase

A) in the selling expense of the buyer.
B) in operating expenses for the seller.
C) to the cost of goods sold of the seller.
D) to a contra-revenue account of the seller.

Freight Costs

Expenses incurred by a company to transport goods from one location to another, often included in the cost of sales or inventory.

Selling Expense

Costs incurred directly in the sale of a product or service, including advertising, sales commissions, and store upkeep.

Merchandise Sold

The total goods that have been sold by a company, typically within a specific period, contributing to its revenue.

  • Understand the handling of freight expenses and their effects on the accounting records of both seller and buyer.
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DR
Daniela RamosJun 22, 2024
Final Answer :
B
Explanation :
Freight costs paid by a seller on merchandise sold to customers are considered part of the selling expenses, which are a component of the operating expenses for the seller. These costs are not directly related to the production (cost of goods sold) nor are they considered a contra-revenue account or an expense of the buyer.