Drag and Drop Question You are implementing Dynamics 365 Finance. You must track freight charges. Freight amounts must be included in the vendor invoice amount and the expense recorded in a ledger…

The correct answer is Item; Ledger account. D365 Finance: AP Charges Configuration for Freight Context In D365 Finance, a Charges Code (AP > Setup > Charges > Charges code) requires two sides to be configured: | Side | Purpose | |---|---| | Debit (Position 1) | Where the freight cost is directed/allocated | | Credit…

Implement and manage accounts payable and expenses

Question

Drag and Drop Question You are implementing Dynamics 365 Finance. You must track freight charges. Freight amounts must be included in the vendor invoice amount and the expense recorded in a ledger account defined for Freight. You need to configure the Accounts payable charges. How should you set up the charges? To answer, drag the appropriate posting type to the correct account type. Each posting type may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content. NOTE: Each correct selection is worth one point. Answer:

Exhibit

Answer Area

Drag items

Ledger accountVendorItem

Correct arrangement

Item
Ledger account

Explanation

D365 Finance: AP Charges Configuration for Freight

Context

In D365 Finance, a Charges Code (AP > Setup > Charges > Charges code) requires two sides to be configured:

Side	Purpose
Debit (Position 1)	Where the freight cost is directed/allocated
Credit (Position 2)	The offset account that funds/tracks the charge

Why This Arrangement

Position 1 - Debit: `Item`

The freight charge is debited to the Item, meaning its cost is added directly to the purchased item's value on the vendor invoice.

Technical reason: This satisfies "freight amounts must be included in the vendor invoice amount" - by allocating freight to the item cost, the total invoice value (items + freight) is captured at the line level. The freight becomes part of the item's landed cost, not a separate transaction.

Position 2 - Credit: `Ledger account`

The offset is credited to a designated Freight ledger account (a GL account defined specifically for freight expense or a freight clearing/accrual account).

Technical reason: This satisfies "the expense recorded in a ledger account defined for Freight" - crediting this GL account provides a discrete audit trail for all freight costs, enabling reporting and reconciliation against the freight cost center or expense account.

Why Not `Vendor`?

This is the most common mistake. Using Vendor as the credit type would:

Increase the AP (accounts payable) balance separately from the item charges
Risk double-counting the liability (the vendor invoice already creates the AP entry)
Prevent freight from being tracked in its own dedicated GL account

Vendor is correct when you're recording a separate freight vendor billing - not when allocating freight within an existing vendor invoice.

Summary of Misconceptions

Mistake	Why It's Wrong
Debit = `Ledger account`, Credit = `Vendor`	Expenses freight to GL correctly, but doesn't allocate it to item cost; breaks the "included in invoice amount" requirement
Debit = `Vendor`, Credit = anything	Vendor is not valid as a debit type for this use case
Both positions = `Ledger account`	Loses item-level freight allocation entirely

The Item + Ledger account combination is the only pairing that simultaneously satisfies both requirements: item-level inclusion in the invoice and GL-level freight expense tracking.

Topics

#accounts payable charges#freight charges#posting types#ledger accounts

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