Question

In: Accounting

Which of the following errors should be corrected by adding the amount of the shipment to the inventory count?

Which of the following errors should be corrected by adding the amount of the shipment to the inventory count?


A. FOB shipping point goods in transit to a customer were miscategorized as FOB destination.

B. FOB destination goods in transit from a supplier were miscategorized as FOB shipping point.

C. FOB destination consignment goods in transit from a supplier were not recorded.

D. FOD destination goods in transit to a customer were miscategorized as FOB shipping point.

Solutions

Expert Solution

Correct answer is D ''FOB destination goods in transit to a customer were miscategorized as FOB shipping point.''

FOB destination means free on board destination which means goods are recorded as sale when reach buyer's dock.So in case D goods were on FOB destination which means they are to be in inventory until they reach customer.So if they were miscategorised as FOB shipping point they are not part of inventory.So to avoid error we should adding the shipment.

ekkarill92 answered 2 years ago
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