Asked by Katrina Mahan on Jul 26, 2024
Verified
Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.
Ending Inventory
Ending inventory refers to the total value of unsold goods that a company holds at the end of an accounting period.
Goods In Transit
Items that have been shipped by a seller but not yet received by the buyer, which can be included in the inventory of either party depending on the shipping terms.
- Know the importance and process of including goods in transit in ending inventory depending on shipping terms.
Verified Answer
AK
Ayzen KenpachiJul 28, 2024
Final Answer :
True
Explanation :
If goods are shipped FOB shipping point, title and ownership of the goods transfer from the seller to the buyer when the goods are shipped. Therefore, any goods in transit at the end of the accounting period should be included in the buyer's ending inventory.
Learning Objectives
- Know the importance and process of including goods in transit in ending inventory depending on shipping terms.