Readers ask: Who is responsible for the freight costs when the terms are fob shipping point?

Who is responsible for the freight costs when the terms are FOB shipping point quizlet?

Terms in this set (13) a. On March 1, Chad Company purchased 20,000 of merchandice terms 2/10, n/30, FOB shipping point from Billy’s company. – With FOB Shipping point the buyer owns the goods while they are in transit, so the buyer pays the freight.

Who is responsible for an FOB origin shipment?

FOB Origin, Freight Prepaid: The seller/shipper pays the cost of shipping while the buyer/receiver of goods assumes the responsibility of goods at the point of origin. FOB Origin, Freight Collect: The buyer pays for freight and shipping costs and assumes full responsibility for the cargo.

When goods are shipped FOB destination and the seller pays the freight charges the buyer?

FOB (Freight on Board) Destination is a shipping term which means that the seller retains the legal title to the goods until they reach the location of the buyer. In this case, the seller pays for the transportation of the freight and takes care of additional freight charges until the goods reach the buyer.

What does FOB shipping point mean quizlet?

FOB shipping point means the buyer pays the freight cost. FOB destination means that the seller ships and pays for the freight cost. FOB shipping point is considered part of purchasing inventory, which account is increased (debited)?

Does FOB mean freight included?

FOB, Free On Board, is a transportation term that indicates that the price for goods includes delivery at the Seller’s expense to a specified point and no further.

Who pays the freight on FOB destination?

For FOB destination, the seller assumes all costs and fees until the goods reach their destination. Upon entry into the port, all fees—including customs, taxes, and other fees—are borne by the buyer.

Does FOB Mean delivered price?

Origin” term of sale or an “F.O.B. Destination” term of sale is that the price of the goods sold in an “F.O.B. Destination” contract is a “delivered price” where the cost of transportation is “built in” to the price. On the other hand, the price of the goods specified in an “F.O.B.

What is the difference between FOB and CIF shipping?

In CIF, the seller is responsible for transporting goods to the nearest port, loading the goods on the ship and paying freight for the goods to be delivered to a port chosen by the buyer. In FOB trading, the seller is only responsible for taking the goods to the nearest port on his or her end.

What does FOB warehouse mean?

Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB origin” means the purchaser pays the shipping cost from the factory or warehouse and gains ownership of the goods as soon as it leaves its point of origin.

How are the shipping terms stated if the buyer is to pay freight costs?

If the buyer is to pay the transportation costs of delivering merchandise, delivery terms are stated as FOB shipping point. Ownership of the goods changes hands at the shipping point, the buyer owns the goods at this point and must pay the transportation cost to get the goods to the destination.

What happens when merchandise is delivered FOB shipping point quizlet?

Abbreviation for free on board; the point when ownership of goods passes to the buyer; FOB shipping point (or factory) means the buyer pays shipping costs and accepts ownership of goods when the seller transfers goods to carrier; FOB destination means the seller pays shipping costs and buyer accepts ownership of goods

Which of the following describes shipping terms of FOB shipping point?

FOB (free on board) shipping point describes freight terms indicating that the seller is responsible for the sold merchandise only to the point from where it is shipped. Goods in transit are between the buyer and the seller as of the end of an accounting period.

Which of the following does FOB shipping point mean?

The term FOB shipping point is a contraction of the term “Free on Board Shipping Point.” The term means that the buyer takes delivery of goods being shipped to it by a supplier once the goods leave the supplier’s shipping dock.