ABC Mart received a $20 freight bill for merchandise it purchased with freight terms of FOB shipping point.

ABC Mart received a $20 freight bill for merchandise it purchased with freight terms of FOB shipping
point. ABC Mart uses a perpetual inventory system. Assuming it paid the bill immediately,
demonstrate the journal entry required to record the freight charges.

Debit Freight In $20; credit Cash $20.
Debit Freight In $20; credit Merchandise Inventory $20
Debit Merchandise Inventory $20; credit Cash $20.
Debit Transportation In $20; credit Cash $20.


X-Mart purchased $300 of merchandise on account for resale. Demonstrate the journal entry to
record this transaction, assuming the periodic inventory system is used.

Credit Merchandise Inventory $300 and debit Accounts Payable $300.
Debit Merchandise Inventory $300 and credit Accounts Payable $300.
Debit Merchandise Inventory $300and credit Sales $300.
Debit Purchases $300 and credit Accounts Payable $300.