Question

Goods in transit which are shipped f.o.b. shipping point should be

Answer 1

Answer: The correct answer is "B. included in the inventory of the buyer."

Explanation: Goods in transit which are shipped f.o.b. (free on board) shipping point should be included in the inventory of the buyer

If the goods are shipped F.O.B, as soon as the goods leave the seller's trade, the seller can declare the sale as completed and complete.

Answer 2

Answer:

Included in the inventory of the buyer

Explanation:

Goods in transit simply refers to items that the seller has shipped, but the buyer has not received it yet. At the end of an accounting period, goods in transit are accorded special attention due to the fact that neither the seller or buyer has the product in their location at that point. In this light, it becomes necessary to look at the sales term to see if it states FOB destination or FOB shipping point. When the term states "FOB destination", then goods in transit are recorded as the seller's property. However, if the term states "FOB shipping point", then goods in transit are recorded as the buyer's property.