Question

Freight-In is the transportation cost on a purchases good while freight-out is the transportation cost on goods sold. True or False?

Answer 1

False. Freight-In refers to the transportation cost incurred when purchasing goods, while Freight-Out refers to the transportation cost incurred when shipping or selling goods.

Step-by-step explanation:

False. Freight-In refers to the transportation cost incurred when purchasing goods, while Freight-Out refers to the transportation cost incurred when shipping or selling goods. Freight-In is considered as part of the cost of goods purchased and is added to the cost of inventory, while Freight-Out is considered as a selling expense and is deducted from revenue. For example, if a business purchases goods for $100 and incurs $10 in Freight-In costs, the cost of the inventory would be $110. When the goods are sold, if the business incurs $5 in Freight-Out costs, the revenue would be reduced by $5.