Dictionary / Freight
What does Freight mean in accounting?
Quick definition
GeneralA charge by a carrier for the transportation of goods. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Carrier bills you for an inbound haul
You run an archery shop. On August 13, an LTL carrier emails a $219 freight bill for a crate of arrow shafts that arrived that morning. The shaft supplier already invoiced the shafts on a separate bill. Freight is the carrier's $219 charge for the haul. Enter a bill dated August 13 to that carrier, coded to freight, so accounts payable shows the carrier. Do not add $219 onto the shaft supplier as if they hauled it.
You ship finished goods and the trucker bills you
You run a canoe shop. On October 21 you send two boats to an outfitter. A freight carrier bills $361 for that outbound haul. That $361 is still freight: the carrier's charge to move the goods. Enter the trucker's bill in QuickBooks Online or Xero, coded to freight-out or shipping expense, so accounts payable shows the trucker. Do not code it as freight-in or add it to boat inventory; those boats already left the shop.
Why it matters
Freight is the carrier's charge for moving goods, not the merchandise invoice and not a call about who eats shipping. You will see it whenever a trucker, freight line, or parcel carrier bills you to haul a shipment in or out; a service shop that never moves product almost never posts it. Enter the freight bill as its own payable so transportation sits as a charge and the carrier stays off the goods vendor. Mix this with freight-in and you jump to inventory cost before you have identified the charge; mix it with freight absorption and you treat the word as the seller leaving outbound shipping off the customer invoice. Code the carrier bill first, then decide whether that charge is inbound cost, outbound expense, or a pass-through on a customer invoice.
Further reading
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What is Freight in bookkeeping?
A charge by a carrier for the transportation of goods.
When should I use Freight?
Use Freight when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Freight?
Freight is used for freight entries, while F.O.B covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.