On November 27,Acme,Inc.ordered merchandise from Zenith Company.Zenith shipped the merchandise to Acme on November 29,FOB shipping point.The merchandise arrived at Acme's warehouse on December 1.Acme paid for the merchandise on January 2.When should Zenith recognize revenue?

Question

Quizplus · Accepted Answer

According to FOB shipping point terms, the responsibility for the merchandise and the revenue recognition transfers to Acme as soon as Zenith ships the merchandise on November 29. Therefore, Zenith should recognize revenue on November 29.