A credit entry would cause a decrease in Freight-in and Freight- out, isn't it? Since both of them have normal debit balance. My tutorial question only stated freight-in. Can someone explain? Thx!:)

Please post the tutorial question in its entirety and we'll see.

Actually, xphelper, there's enough info there to answer it :-) It just sounded a little confusing.

And yes, it would decrease both accounts. Freight-Out is an expense account used when you're on the selling side. So you debit that when you get charged freight when you as the seller are responsible for it. Freight-In is also a debit account, used when on the buying side, which will eventually get added to the cost of the purchases. There's different methods of doing that and I can't know which your book is using. But regardless, freight-in has to be a debit account.

So either way, a credit would decrease them. I don't know if you meant your tutorial only explained one of them, or if you meant literally a question only asked about one of them. If it only asked about one, then you don't need to worry about the other for the sake of the question. But you need to know it anyway. :-)

(I admit I'm curious why you're crediting a freight account though.)

Quote:

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Originally Posted by zhao2vic

A credit entry would cause a decrease in Freight-in and Freight- out, isn't it? Since both of them have normal debit balance. My tutorial question only stated freight-in. Can someone explain? Thx!:)

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Thx for your feedback, morgaine300 and xphelper!
My tutorial question is:
A credit entry would cause a decrease in
A) Sales
B) Purchase discounts
C) Purchase returns and allowances
D) Freight-In
E) Freight-Out
Ans is D though I think D and E are both acceptable

I see what you mean. Both D & E are correct. Weird question -- someone wasn't paying attention or something. :-)

Thx, morgaine300! Hv a nice day!:)