If the Shipping Terms Are FOB Shipping Point Than the Shipping

question 226

Multiple Choice

If the shipping terms are FOB shipping point than the shipping costs are paid by the ________.

• A)seller and included as part of the cost of the seller's inventory
• B)buyer and included as part of selling expenses at the time of the purchase
• C)seller and included as part of the selling expenses at the time of the sale
• D)buyer and included as part of the cost of the buyer's inventory at the time of the purchase

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Definitions:

Sales

The activity or business of selling goods or services, generating revenue for companies.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use rather than selling those resources.

Explicit Costs

Direct, out-of-pocket payments for resources employed by firms for production, such as wages or rent.

Accounting Profit

The net income a company reports on the financial statements, calculated by subtracting total expenses from total revenues.