Kramer, Inc

Multiple Choice

Kramer, Inc. uses a periodic inventory system. Kramer purchased $1,000 of merchandise on credit, with terms 1/10, n/30, FOB shipping point. The shipping cost of $150 was paid upon receipt of the goods. The journal entry to record the shipping cost includes a credit to Cash and a debit to:

A) Freight Expense
B) Merchandise Inventory
C) Purchases
D) Transportation-In
E) Accounts Payable