Asked by Katherine Fortune on May 03, 2024
Verified
Who is responsible for the freight costs when the terms are FOB shipping point?
A) the ultimate customer
B) the buyer
C) the seller
D) either the seller or the buyer
FOB Shipping Point
A shipping term indicating that the buyer assumes responsibility for the goods and the cost of transportation as soon as the goods leave the seller's premises.
Freight Costs
Expenses associated with transporting goods from one place to another, including the costs of shipping, handling, and insurance of goods during transit.
- Interpret the ramifications of freight agreements and the transitioning of ownership on the expenses of inventory.
Verified Answer
MD
Matthew DurhamMay 08, 2024
Final Answer :
B
Explanation :
When the terms are FOB shipping point, the buyer is responsible for the freight costs. FOB shipping point means that the buyer takes ownership of the goods the moment they are shipped, and therefore is responsible for any costs associated with shipping the goods to their final destination.
Learning Objectives
- Interpret the ramifications of freight agreements and the transitioning of ownership on the expenses of inventory.