Asked by Alison Vidas on Jun 12, 2024
Verified
Paden Company purchased merchandise from Emmett Company with freight terms of FOB shipping point. The freight costs will be paid by the
A) seller.
B) buyer.
C) transportation company.
D) buyer and the seller.
FOB Shipping Point
This term represents a shipping agreement where the buyer takes responsibility for the goods once they are shipped, implying ownership transfer at the seller's location.
Freight Costs
Costs a company bears to move merchandise from one location to another.
Purchased Merchandise
Goods acquired by a business for the purpose of reselling them to final consumers.
- Learn how freight costs are accounted for in transactions and how they affect Inventory accounts.
Verified Answer
JS
Jessica SilvaJun 16, 2024
Final Answer :
B
Explanation :
FOB shipping point means that the buyer is responsible for paying the freight costs once the goods are shipped. Therefore, in this case, Paden Company will be responsible for paying the freight costs.
Learning Objectives
- Learn how freight costs are accounted for in transactions and how they affect Inventory accounts.
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