CHAPTER 7: Transportation Out

Question 1

fob destination, freight prepaid

Answer 1

1. accounts receivable, transportation out / sales, cash
2. cash, sales discounts / accounts receivable

Question 2

fob shopping point, freight collect

Answer 2

1. accounts receivable / sales
2. cash, sales discounts / accounts receivable

Question 3

fob destination, freight collect

Answer 3

1. accounts receivable, transportation out / sales
2. cash, sales discounts / accounts receivable

sales - transportation out = a/r
sales x discount -> a/r - orig. discount

Question 4

fob shipping point, freight prepaid

Answer 4

1. accounts receivable / sales, cash
2. cash, sales discounts / accounts receivable

cash + sales = accounts receivable
slaes x discount -> a/r - orig discount = cash