On December 12,Occident,Ltd.,a company in Singapore,ordered merchandise from San Francisco Exports.The merchandise was shipped to Occident on December 29,FOB destination.The merchandise arrived at Occident's warehouse on February 1.Occident paid for the merchandise on March 2.When should Occident record the purchase?

Question

Quizplus · Accepted Answer

Occident should record the purchase on February 1, as that is when the merchandise arrived at their warehouse and the transfer of control and ownership occurred with FOB destination terms. The payment made on March 2 is simply the settlement of the earlier purchase transaction.