Goods in transit which are shipped F.o.b. shipping point should be
A) included in the inventory of the seller.
B) included in the inventory of the buyer.
C) included in the inventory of the shipping company.
D) None of these are correct.

Question

Quizplus · Accepted Answer

Goods in transit are the goods that have been shipped but have not yet been received by the buyer. When goods are shipped F.o.b. shipping point, the ownership and responsibility for the goods transfer from the seller to the buyer once the goods have been shipped. Therefore, the goods in transit should be included in the inventory of the buyer, as they will become the owner of the goods once they are shipped. The seller should not include F.o.b. shipping point goods in their inventory, as they are no longer responsible for these goods once they are shipped. The shipping company is simply a carrier and does not own the goods, so they should not include F.o.b. shipping point goods in their inventory either.

Goods in Transit Which Are Shipped F