Explain about delivery expense, Accounting Basics

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Q. Explain about delivery expense?

When shipping goods FOB destination freight prepaid the seller is accountable for and pays the freight bill. For the reason that the seller cannot bill a separate freight cost to the buyer the buyer shows no entry for freight on its books. The seller though has undoubtedly considered the freight cost in setting selling prices. The following entry is necessary on the seller's books

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While the terms are FOB destination the seller records the freight costs as delivery expense this selling expense appears on the income statement with other selling expenses.


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