Final answer:
In FOB shipping point terms, the buyer is responsible for shipping charges. These charges are recorded by debiting Inventory and crediting cash since the costs are associated with bringing the inventory to its location for sale. Therefore correct option is C
Step-by-step explanation:
The buyer's accountant should record transportation charges on a shipment labeled FOB shipping point by debiting Inventory and crediting cash, because in such terms, the buyer is responsible for the shipping charges from the shipping point. Therefore, the correct answer is C) Debit Inventory, Credit cash, because the buyer pays the shipping charges. The inclusion of transportation costs into the Inventory account follows the accounting principle that all costs needed to bring an asset to its intended use should be capitalized; hence, the transport cost becomes part of the cost of the inventory.