Tri-State Corporation ordered materials from Down-State Manufacturing on October 1,2006.Down-State shipped the materials by rail on October 5 and the railroad notified Tri-State on October 12,that the goods had arrived.Tri-State picked up the materials on October 13.The terms of the sale are FOB shipping point.On what date should Tri-State consider this a purchase?
A)October 1
B)October 5
C)October 12
D)October 13

Question

Quizplus · Accepted Answer

The terms of the sale are FOB shipping point, which means that the ownership and responsibility of the goods transferred from Down-State Manufacturing to Tri-State Corporation once the goods were shipped on October 5. Therefore, October 5 is the date when Tri-State should consider this a purchase.

Tri-State Corporation Ordered Materials from Down-State Manufacturing on October 1,2006