If Goods Shipped FOB Destination Are in Transit at the End

question 49

Multiple Choice

If goods shipped FOB destination are in transit at the end of the year,they should be included in the inventory balance of the

• A) seller.
• B) common carrier.
• C) buyer.
• D) bank.

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Definitions:

Accounts Payable

Liabilities owed to suppliers or creditors for goods and services received but not yet paid for.

Purchase

The act of buying goods or services, which can include raw materials, equipment, or any item required for business operations.

Overapplied Overhead

Occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Cost of Goods Sold

The immediate expenses related to the manufacturing of products that a company sells.