Final answer:
The journal entry when freight costs are incurred by the seller depends on the shipping terms agreed upon between the buyer and seller. If the seller agrees to pay for the freight, the journal entry would typically include a debit to Freight Expense and a credit to Accounts Payable or Cash. If the buyer pays for the freight, the seller would not record any journal entry for the freight costs.
Step-by-step explanation:
The journal entry when freight costs are incurred by the seller depends on the shipping terms agreed upon between the buyer and seller. If the seller agrees to pay for the freight, the journal entry would typically include:
- Debit to Freight Expense (expense account)
- Credit to Accounts Payable (liability account) or Cash (asset account)
If, on the other hand, the buyer agrees to pay for the freight, the seller would not record any journal entry related to the freight costs.