My freight company charges me a freight cost and any additional fees payable e.g. if product is lost or damaged then an amount is paid to me is classified as warranty.
Freight Cost: $36.00
GST is payable on Total amount of $40.00.
Firstly all my products that I sell to the customer are inclusive of freight i.e. free shipping. This means I dont add it to the sales invoice and create a seperate expense. Firstly is this the correct way to do this?
Secondly, would I have a separate account for warranty in expenses and add the warranty charge in that expense account?
Thirdly, how would I add both the freight and warranty together? Would this be as a journal entry?