If the terms are FOB Shipping Point, the buyer pays the freight costs and charges them to the Inventory account if a perpetual inventory system is used.

Question

Quizplus · Accepted Answer

FOB Shipping Point means that the buyer takes ownership of the goods as soon as they leave the seller's premises. Therefore, the buyer is responsible for paying the freight costs and would charge them to the Inventory account if a perpetual inventory system is used.

If the Terms Are FOB Shipping Point, the Buyer Pays