If goods shipped FOB destination are in transit at the end of each year, they should be included in the inventory balance of the Group of answer choicesSellerFreight CompanyBuyerBuyer and Seller
Question
If goods shipped FOB destination are in transit at the end of each year, they should be included in the inventory balance of the Group of answer choicesSellerFreight CompanyBuyerBuyer and Seller
Solution
The goods should be included in the inventory balance of the Seller.
Here's why:
FOB (Free On Board) destination means that the goods are considered to be delivered when they reach the destination. This means that the seller retains ownership and responsibility for the goods until they are delivered to the buyer. Therefore, if the goods are in transit at the end of the year, they are still the seller's inventory because they have not yet been delivered to the buyer.
Similar Questions
Select all that applyThe buyer and seller of merchandise must agree on who is responsible for paying freight terms. Show your understanding of freight terms by selecting all of the correct statements below.Multiple select question.Terms FOB destination means that the seller is responsible for shipping costs.When the shipping costs are the responsibility of the buyer, then the Merchandise Inventory account is debited for the freight charges.Revenue for the sale will be recorded after the goods reach their destination, if the goods are shipped FOB destination.Terms FOB shipping point means the buyer accepts ownership when the goods depart the seller's place of business.When the shipping costs are the responsibility of the seller, then the Merchandise Inventory account is debited.Terms FOB shipping point means the seller of the goods is responsible for freight charges.
If goods in transit are shipped FOB destination:Question 4Answera.the seller has legal title to the goods until they are deliveredb.the buyer has legal title to the goods until they are deliveredc.the transportation company has legal title to the goods while the goods are in transitd.no one has legal title to the goods until they are delivered
If the seller is responsible for the shipping costs of merchandise sold, the shipping terms will be specified as:Multiple choice question.FOB factoryFOB startFOB destinationFOB shipping point
In FOB Shipping Point the buyer is responsible for paying the freight costs incurred in transporting the merchandise from the point of shipment to its destination.Group of answer choicesNo answer text provided.No answer text provided.TrueFalse
The terms of shipment wherein title or ownership to goods is transferred from the seller to the buyer only upon the buyer’s receipt of merchandise*a. FOB shipping pointb. FOB destinationc. Freight prepaidd. Freight collect
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.