Suppose Company A places an order with Company B on May 12.On May 14,Company B ships the ordered goods to Company A with terms FOB destination.The goods arrive at Company A on May 17.Company A begins selling the goods to customers on May 19 and pays Company B on May 20.When would Company B record the sale of goods to Company A?

Question

Quizplus · Accepted Answer

Company B would record the sale of goods to Company A on May 17, the date when the goods arrived at Company A's destination. This is because the terms were FOB destination, which means the responsibility for the goods passes from Company B to Company A upon arrival at the destination. Therefore, the sale is considered complete and Company B can recognize the revenue at that point.

Suppose Company a Places an Order with Company B on May