Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Question
Chapter 5, Problem 1Q
To determine
Explain the terms of FOB shipping point and FOB destination, and state the accounting and business implications of the shipping and it’s important during shipping.
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FOB SHIPPING POINT, who is the owner of goods in transit?
Describe FOB shipping point and FOB destination. When does the buyer take ownership of the goods, and who typically pays the freight?
It is used to who is responsible for paying shipping and when the title of the goods passes from seller to buyer: This term will be applicable to
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Discount term
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Credit terms
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Cash term
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Chapter 5 Solutions
Financial Accounting
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Similar questions
- Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.arrow_forwardWhich of the following is not a characteristic of FOB Destination? A. The seller pays for shipping. B. The seller owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.arrow_forwardWhich of the following is an agent in a purchases and payments structure model? Question 6Answer a. Cash disbursement b. Inventory c. Employee labour d. Supplier e. Receipt of goodsarrow_forward
- Which of the following is not a characteristic of FOB Destination?A. The seller pays for shipping.B. The seller owns goods in transit.C. The point of transfer is when the goods leave the seller’s place of business.D. The point of transfer is when the goods arrive at the buyer’s place of businessarrow_forwardWhat specific accounts are recognized when a business purchases equipment on credit?arrow_forwardWhat is meant by purchase return and sales return in accounting?arrow_forward
- Explain the implications relating to ownership when goods are: In Transit (FOB) Shipping Point In Transit (FOB) Destination On Consignmentarrow_forwardWhich of the following indicates that ownership of the purchased items changes as soon as the goods leave the seller's place of business lie. when shipping begins)? Select one: a. FOB Destination and FOB Shipping Point b. FOB Destination Point c. FOB Destination d. FOB Shipping Pointarrow_forwardDistinguish between FOB Shipping Point and FOB Destination. Identify the freight terms that will result in a debit to Inventory and which one will result in a debit to Freight expenses by the seller.arrow_forward
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