On May 27,Ace Electronics ordered merchandise from Elmo Company.Elmo shipped the merchandise to Ace on May 31,FOB destination.The merchandise arrived at Ace's warehouse on June 2.Ace paid for the merchandise on July 1.When should Ace record the purchase?

Question

Quizplus · Accepted Answer

According to the FOB destination terms, the ownership of the merchandise transfers to Ace at their destination, which is their warehouse on June 2. Therefore, the purchase should be recorded on June 2 when the merchandise arrived at Ace's warehouse.

On May 27,Ace Electronics Ordered Merchandise from Elmo Company