Asked by Michael Frank on Jul 28, 2024
Verified
Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller's ending inventory.
FOB Destination
A shipping term indicating that the seller bears transportation costs and risk until the goods reach the buyer's location.
Net Income
The amount of money remaining when all operating expenses, interests, taxes, and preferred stock dividends have been deducted from a company's total revenue.
Ending Inventory
The value of goods available for sale at the end of an accounting period, calculated for use in financial statements and inventory management.
- Acknowledge the consequences of inventory miscalculations on net income.
- Apprehend the effects FOB shipping terms have on inventory accounting practices.
Verified Answer
PL
Learning Objectives
- Acknowledge the consequences of inventory miscalculations on net income.
- Apprehend the effects FOB shipping terms have on inventory accounting practices.