A company sells a product FOB destination. The product is shipped on December 29, 2015 and the customer receives the shipment on January 3, 2016. Which of the following is true?
A)The sale will be recorded when the customer's credit card information is received.
B)The sale will be recorded when the shipment is received by the customer.
C)The sale will be recorded when the shipment is shipped.
D)The sale will be recorded when it is known there will be no returns or allowances.

Question

Quizplus · Accepted Answer

Since the company sells the product FOB destination, the ownership and risk of loss transfers to the customer upon delivery, which in this case is on January 3, 2016. Therefore, the sale will be recorded when the shipment is received by the customer.

A Company Sells a Product FOB Destination