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's

A. Cost of goods sold.

B. Freight-out costs.

C. Selling expenses.

D. Accounts receivable.

Question

Business

Wesley Manning

28 February, 20:43

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's

A. Cost of goods sold.

B. Freight-out costs.

C. Selling expenses.

D. Accounts receivable.

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Answers (1)

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Tyree · Answer 1

D. Accounts receivable.

Explanation:

Cost is paid on the behalf of consignor by consignee and it is recoverable from the payment of sale of goods to Consignor Dale Co. Until that the amount is recorded as receivable from Dale Co. in the books of Jel Co. Jel Co. will deduct the Freight cost from the sale amount of the goods and pay the remaining amount to Dale Co.