What kind of account is freight in?

What kind of account is freight in?

It falls under the umbrella category of expenses and is treated like other expense accounts in relation to the accounting equation, however, under generally accepted accounting rules, if the freight is Freight expense has a normal debit balance.

Is freight in an asset account?

Freight Costs as it relates to assets: If the freight is part of an asset’s cost, it is to be considered an extension of the asset’s overall value.

What type of expense is freight in?

Usually, freight expenses are recorded as other “general expenses.” How the cost is recorded may depend on who is paying the freight cost and whether the cost is included in the asset’s value/price.

What account is freight in and out?

Therefore, when freight-in is incurred, the company would debit inventory (freight-in) and credit cash (cash outflow to pay the expense). Freight-in only flows through cost of goods sold when inventory is sold and revenue is recognized.

What is a freight in?

Freight in is the transportation cost associated with the delivery of goods from a supplier to the receiving entity. For accounting purposes, the recipient adds this cost to the cost of the received goods.

Why is freight in an asset?

If you see duty and freight as being wrapped up in the value of the goods it will be included as an asset along with the original purchase price. This increases your balance sheet and therefore the worth of the company.