At the year-end inventory count,if goods in transit are shipped FOB shipping point,they should be included in the inventory count of
A)the seller.
B)the buyer.
C)both the seller and the buyer.
D)neither the seller nor the buyer.

Question

Quizplus · Accepted Answer

When goods are shipped FOB (free on board) shipping point, the buyer takes ownership and bears the risks of the goods once they are shipped. Therefore, goods in transit should be included in the inventory count of the buyer. The seller should not include them in their inventory count since they no longer own or possess the goods.

At the Year-End Inventory Count,if Goods in Transit Are Shipped