f NetSolutions (the buyer) purchases merchandise from a wholesale company or vendor (the seller) and the NetSolutions pays the transportation costs (freight/shipping terms--FOB Shipping), who owns the merchandise while the merchandise is in transit? Group of answer choices NetSolutions the vendor the trucking company No one (neither the buyer or the seller) until the merchandise is delivered.

f NetSolutions (the buyer) purchases merchandise from a wholesale company or vendor (the seller) and the NetSolutions pays the transportation costs (freight/shipping terms--FOB Shipping), who owns the merchandise while the merchandise is in transit? Group of answer choices NetSolutions the vendor the trucking company No one (neither the buyer or the seller) until the merchandise is delivered.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 17MC: Which of the following is not a characteristic of FOB Destination? A. The seller pays for shipping....

See similar textbooks

Similar questions

Which of the following is not a characteristic of FOB Shipping Point? A. The buyer pays for shipping. B. The buyer owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
Which of the following is not a characteristic of FOB Destination? A. The seller pays for shipping. B. The seller owns goods in transit. C. The point of transfer is when the goods leave the sellers place of business. D. The point of transfer is when the goods arrive at the buyers place of business.
Merchandise Accounting Merchandise Inventory Raw materials Work in process Finished goods Gross profit Net sales Sales revenue Cost of goods available for sale Cost of goods sold Perpetual system Periodic system Transportation-In Purchases FOB destination point FOB shipping point Gross profit ratio An adjunct account used to record freight costs paid by the buyer. A system in which the Inventory account is increased at the time of each purchase and decreased at the time of each sale. Terms that require the seller to pay for the cost of shipping the merchandise to the buyer. Terms that require the buyer to pay for the shipping costs. A system in which the Inventory account is updated only at the end of the period. Beginning inventory plus cost of goods purchased. An account used in a periodic inventory system to record acquisitions of merchandise. Sales revenue less sales returns and allowances and sales discounts. Cost of goods available for sale minus ending inventory. Gross profit divided by net sales. Net sales less cost of goods sold. The cost of unfinished products in a manufacturing company. The account wholesalers and retailers use to report inventory held for sale. The inventory of a manufacturer before the addition of any direct labor or manufacturing overhead. A manufacturers inventory that is complete and ready for sale. A representation of the inflow of assets from the sale of a product.
If goods are sold on terms FOB shipping point, the ________. A. seller normally pays the transportation costs B. buyer normally pays the transportation costs C. shipping company bears the transportation cost D. buyer and the seller split the transportation costs
If NetSolutions purchases merchandise inventory and pays the shipping or freight costs, the shipping terms are called ___________________. Group of answer choices FOB (free on board) destination FOB (free on board) merchandise FOB (free on board) shipping FOB (free on board) sales
Freight on Board (FOB) shipping point requires that the seller pays the shipping cost.. True or False
When goods are shipped FOB destination and the seller pays the freight charges, the buyer a.does not take a discount b.journalizes a reimbursement to the seller c.makes no journal entry for the freight d.journalizes a reduction for the cost of the merchandise
The Yankee Wholesale Company sells merchandise to a variety of retailers. Yankee uses different freight terms with its various customers and suppliers. All sales are made on account. Required For each of the following transactions, indicate which company had ownership of the goods in transit: a. Yankee sold merchandise to X-Mart Stores, with shipping terms of F.O.B shipping point. b. Yankee purchased merchandise from Zendo Manufacturing Company, with shipping terms of F.O.B destination. c. Yankee sold merchandise to Mary's Boutique, with shipping terms of F.O.B destination. d. Sunshine Manufacturing Company sold merchandise to Yankee, with shipping terms of F.O.B. shipping point. e. Yankee purchased merchandise from Warfield Manufacturing Company, with freight terms of F.O.B. shipping point. f. Stevenson Stores purchased merchandise from Yankee, with shipping terms of F.O.B. shipping point.
Requirement a. What are the accounting requirements for a correct sales cutoff? A. A shipment should be recorded as a sale when the risks of ownership transfer to the buyer and collectability is reasonably assured. B. A shipment should be recorded as a sale when the merchandise is shipped. C. A shipment should be recorded as a sale when the payment for the merchandise has beeb received by the seller. D. A shipment should be recorded as a sale when the merchandise is received by the purchaser.
FOB destination of a Merchandise Business means: a. Goods are placed free on board to the buyer's place of business. b. Seller is responsible for paying the freight charges. c. Buyer is responsible for paying the freight charges. d. Seller ships the goods to buyer destination without charge to the buyer
Goods in Transit The Yankee Wholesale Company sells merchandise to a variety of retailers. Yankee uses different freight terms with its various customers and suppliers. All sales are made on account. Required For each of the following transactions, indicate which company had ownership of the goods in transit: a. Yankee sold merchandise to X-Mart Stores, with shipping terms of F.O.B shipping point. AnswerX-MartZendo Manufacturing CompanyYankee Wholesale CompanyStevenson Stores b. Yankee purchased merchandise from Zendo Manufacturing Company, with shipping terms of F.O.B destination.AnswerX-MartZendo Manufacturing CompanyYankee Wholesale CompanyStevenson Stores c. Yankee sold merchandise to Mary's Boutique, with shipping terms of F.O.B destination. AnswerX-MartZendo Manufacturing CompanyYankee Wholesale CompanyStevenson Stores d. Sunshine Manufacturing Company sold merchandise to Yankee, with shipping terms of F.O.B. shipping point. AnswerX-MartZendo Manufacturing CompanyYankee…
Which one of the following statements is false? a. FOB shipping point means the buyer has legal title to the goods while they are in-transit b. FOB shipping point means the buyer has legal title to the goods when they are shipped c. FOB destination means the seller has legal title to the goods until they reach the buyer's place business d. FOB shipping means the buyer acquires legal title to the goods when they reachg the buyer's place of business