QQuestionAccounting
QuestionAccounting
Goods in transit are included in a purchaser's inventory:
When the supplier is responsible for freight charges.
At any time during transit.
When the purchaser is responsible for paying freight charges.
After the half-way point between the buyer and seller.
If the goods are shipped FOB destination.
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Answer
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Step 1: Determine when goods in transit are included in a purchaser's inventory based on who is responsible for freight charges.
If the supplier is responsible for freight charges, the purchaser includes the goods in their inventory at any time during transit. This is because the ownership of the goods is transferred from the supplier to the purchaser as soon as the goods are shipped, even though the supplier is paying for the transportation costs.
Final Answer
When the supplier is responsible for freight charges, goods in transit are included in a purchaser's inventory at any time during transit.
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