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) paid for in advance.
B) both shipped and received prior to the balance sheet date.
C) received prior to the balance sheet date.
D) shipped prior to the balance sheet date.

Question

Quizplus · Accepted Answer

Under FOB origin terms, ownership transfers to the buyer when the goods are shipped. Therefore, if the goods were shipped prior to the balance sheet date, they should be recorded in the current period.

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