A Company Has Purchased Inventory and Received an Invoice That

question 148

Multiple Choice

A company has purchased inventory and received an invoice that requires the buyer to pay the transportation costs for delivering the merchandise.The terms are ________.

• A) FOB destination
• B) FOB shipping point
• C) FOB, 2/10, n/30
• D) FOB in transit

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Definitions:

Maker

Typically refers to the individual or entity that creates or executes a financial instrument, like a check or promissory note, thereby committing to the terms outlined therein.

Overdue

When an instrument is not paid when due or at maturity.

Reasonable Period

An amount of time regarded as fairly appropriate under the circumstances, considering what a rational person would deem sufficient.

Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or to the order of a specific person or to the bearer.