Asked by Shania Gaston on Jul 24, 2024
Verified
Merchandise was purchased FOB destination on the last day of the year. The cost of the merchandise purchased was not included in ending inventory.
FOB Destination
A shipping term indicating that the seller is responsible for the freight and other shipping charges until the goods reach the buyer's location.
Net Income
The amount of earnings remaining after all expenses, including taxes and interest, have been deducted from total revenues.
Ending Inventory
The total value of all goods available for sale at the end of an accounting period, calculated to evaluate stock levels and assess cost of goods sold.
- Understand the impact of inventory errors on net income.
- Understand the implications of FOB shipping terms on inventory accounting.
Verified Answer
NH
Learning Objectives
- Understand the impact of inventory errors on net income.
- Understand the implications of FOB shipping terms on inventory accounting.