Goods shipped FOB (free on board) shipping point should be _______.
A)included in inventory by both the buyer and seller upon shipment
B)included in the inventory and accounts payable of the selling entity upon shipment
C)included in the inventory and accounts payable of the purchasing entity upon shipment
D)excluded by both the buyer and seller upon shipment

Question

Quizplus · Accepted Answer

Goods shipped FOB shipping point means that the control of the goods transfers from the seller to the buyer upon shipment. Therefore, the purchasing entity should include the goods in their inventory and accounts payable upon shipment. The selling entity should not include these goods as part of their inventory or accounts payable since they no longer have control over the goods.

Goods Shipped FOB (Free on Board) Shipping Point Should Be