Freight on Inventory Purchases

[Pam Carson]

When I enter freight as a non-stock item with an inventory item purchase invoice do I use the cost of sales - freight account instead of the freight expense account? Obviously I'm not an accountant!!

[jag]

IMHO,

I think you should use the freight expense account.

[NWBizMan]

I use a Cost-of-Sales G/L account. Two reasons for doing so, one, I can then use the Expense account for outgoing shipments from my place of business. Secondly, I can then group drop shipment freight charges under the COGs which more correctly reflects the total Cost-of-Goods sold for each transaction and the cost category as a whole. This makes my reporting easier to understand, by separating "drop shipment" freight and "outgoing" freight.