Asked by Ashley Tyler on Jun 11, 2024
Verified
Goods in transit should be included in the inventory of the buyer when the
A) public carrier accepts the goods from the seller.
B) goods reach the buyer.
C) terms of sale are FOB destination.
D) terms of sale are FOB shipping point.
FOB Shipping Point
A shipping term indicating that the buyer takes responsibility for goods and their transportation costs as soon as the goods leave the seller's premises.
Goods In Transit
Merchandise or stock that has been shipped by the seller but has not yet been received by the purchaser.
- Comprehend the treatment of goods in transit and consignment under inventory accounting.
Verified Answer
AZ
Ali Zain SamnaniJun 17, 2024
Final Answer :
D
Explanation :
Goods in transit should be included in the inventory of the buyer when the terms of sale are FOB (Free On Board) shipping point, as ownership of the goods transfers to the buyer when the goods leave the seller's premises.
Learning Objectives
- Comprehend the treatment of goods in transit and consignment under inventory accounting.