Which goods in transit would be recorded in inventory at year end?
A)Goods purchased with terms F.O.B. destination point that were received after year end.
B)Goods purchased with terms F.O.B. shipping point that were received after year end.
C)Goods sold F.O.B. shipping point that were shipped two weeks before year end.
D)Goods returned for credit, with terms F.O.B. destination point, received two days after year end.

Question

Quizplus · Accepted Answer

Goods purchased with terms F.O.B. shipping point that were received after year end are recorded in inventory at year end because title and risk of loss transfer to the buyer at the shipping point, therefore the goods were already owned by the buyer at year end. Goods purchased with terms F.O.B. destination point are owned by seller until they reach the buyer's location, so they would not be recorded in inventory at year end. Goods sold F.O.B. shipping point are owned by buyer after they leave the shipping point, so they would be recorded in the buyer's inventory at year end. Goods returned for credit, with terms F.O.B. destination point, are owned by the buyer until they reach the seller, so they would not be recorded in the buyer's inventory at year end.

Which Goods in Transit Would Be Recorded in Inventory at Year