When an acquisition is on an FOB (freight on board)origin basis,the inventory and related accounts payable must be recorded in the current period if the goods were
A)received prior to the balance sheet date.
B)shipped prior to the balance sheet date.
C)both shipped and received prior to the balance sheet date.
D)paid for.

Question

Quizplus · Accepted Answer

When an acquisition is on an FOB origin basis, the buyer takes ownership of the goods once they are shipped, not when they are received. Therefore, the inventory and related accounts payable should be recorded in the current period if the goods were shipped prior to the balance sheet date.

When an Acquisition Is on an FOB (Freight on Board)origin