When an acquisition is on an FOB origin basis, the inventory and related accounts payable must be recorded in the current period if the goods were:
A) received prior to the balance sheet date.
B) shipped prior to the balance sheet date.
C) both shipped and received prior to the balance sheet date.
D) paid for in advance.

Question

Quizplus · Accepted Answer

Under FOB origin, title and responsibility transfer to the buyer as soon as the goods are shipped. Therefore, if the goods were shipped prior to the balance sheet date, the inventory and related accounts payable should be recorded in the current period.

When an Acquisition Is on an FOB Origin Basis, the Inventory