76 – Freight & Express/Postage

Operating Expenses

 

Synopsis

Account 76

Debits

Credits

  1. The total expense of freight, cartage, express, and postage on all incoming and outgoing shipments of parts, accessories, and other miscellaneous items.

  2. All postage expense in the retailer.

  3. Rental expense of postage equipment.

  1. The amount of collections and allowances that offset such freight, cartage, express, and postage charges.

 

 

Remarks:

Freight costs on items ordered by other departments should be charged to the ordering department (for example, body parts ordered on an overnight delivery basis by the body shop).

Freight costs applicable to vehicles, capital assets, and non-inventory items should be charged to the appropriate inventory account together with the original purchase.

The freight costs applicable to parts and accessories receipts should not be charged to the respective inventory account as this will distort the inventory and cause sizeable inventory adjustments when the physical count is reconciled to the book balance.  Postage used in connection with direct-mail advertising should be expensed to the appropriate departments advertising account. 

Postage expense should be charged to the applicable department, e.g., new vehicle thank-you letters would be charged to the new vehicle departments.

Note: