Question

(True) or (False)? Goods in-transit to a buyer should be counted as buyer’s inventory if they were shipped FOB destination.

Answer 1

Answer:

Correct answer is FALSE

Explanation:

FOB Destination transfers ownership of the goods to the buyer after the goods reached to its destination (either in the buyer’s warehouse or any place stated in the contract to be delivered). Thus, goods in-transit under FOB destination still belongs to the seller and not to the buyer yet. Moreover, it should not be included to buyer’s inventory because the title of ownership of the said goods still belongs to the seller at the time of transit.