Question

WHAT TYPE OF TRANSACTION IS FREIGHT INWARD- *
A) REVENUE
B) CAPITAL
C) DEFERRED REVENUE
D) OPERATING ​

Answer 1

Answer:

deferred revenue...... .......

Answer 2

Option B is the correct answer i.e., Capital.

• Capital transaction is freight inward.
• The freight paid on items purchased for manufacturing or resale is recorded in the trading account under manufacturing or direct expenses.
• Since it is a direct expense, the trading account is debited.
• Capital expenses are the costs incurred by a company before the asset is ready.
• For instance, the cost of the machinery is increased by the freight, the excise tax, and the installation fee.
• When the product is sold, freight-in expenses will be deducted from the cost of goods sold and capitalized into inventory as part of the production process.
• The expense paid to send finished goods to a distributor or retailer is known as freight-in. When a selling expense, freight out is deducted as it is incurred.

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