If sales are made FOB (free on board) shipping point or FOB destination at a period end, revenue does not need to be adjusted in either situation.

Question

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If sales are made FOB shipping point, revenue is recognized when the goods are shipped out and ownership is transferred to the buyer. However, if sales are made FOB destination, revenue is recognized only when the goods are received by the buyer at the destination. In both cases, if the period end has been reached but the goods have not yet been shipped or received, revenue should be recognized based on the progress towards completion of the sale. Therefore, adjustments may be needed.

If Sales Are Made FOB (Free on Board) Shipping Point