If goods are shipped FOB destination, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete before that point.

Question

Quizplus · Accepted Answer

When goods are shipped FOB destination, the seller retains the risks of damage or loss during transportation, and thus is not entitled to record revenue until the goods have reached their destination and been accepted by the buyer. Therefore, the transaction is not complete until the goods arrive at their destination.

If Goods Are Shipped FOB Destination, the Seller Does Not