Question

Jel Co., a consignee, paid the freight costs for goods shipped from Dale Co., a consignor. These freight costs are to be deducted from Jel's payment to Dale when the consignment goods are sold. Until Jel sells the goods, the freight costs should be included in Jel'sA. Cost of goods sold.B. Freight-out costs.C. Selling expenses.D. Accounts receivable.

Answer 1

The correct answer is d) Accounts receivable

Step-by-step explanation:

When Jel Co. deducts the costs from the amount it submits to Dale Co, Jel Co will recover the freight costs.

However, until that event occurs, the amount spent on freight is recorded in a receivable account.