In this lesson, unravel the intricacies of title transfers in shipping terms through Nick Palazzolo's clear explanations of FOB (Free On Board) shipping point and FOB destination. Nick breaks down the moment when the title of goods transfers ownership and the correlating shift in liability from seller to buyer. With practical insights, he delves into how these terms affect inventory accounts and the making of journal entries. Highlighting the importance of these entries, Nick walks through a typical transaction, detailing the debit and credit movements for cash, inventory, revenue, and cost of goods sold, and even throws in some handy tips for remembering them. Get ready to demystify the legal and accounting implications of FOB terms, from in-transit goods to consignment specifics, and understand why they matter when presenting financial statements accurately.
Lesson: Title Transfer: FOB Shipping Point and FOB Destination
In this lesson, unravel the intricacies of title transfers in shipping terms through Nick Palazzolo's clear explanations of FOB (Free On Board) shipping point and FOB destination. Nick breaks down the moment when the title of goods transfers ownership and the correlating shift in liability from seller to buyer. With practical insights, he delves into how these terms affect inventory accounts and the making of journal entries. Highlighting the importance of these entries, Nick walks through a typical transaction, detailing the debit and credit movements for cash, inventory, revenue, and cost of goods sold, and even throws in some handy tips for remembering them. Get ready to demystify the legal and accounting implications of FOB terms, from in-transit goods to consignment specifics, and understand why they matter when presenting financial statements accurately.
Updated: Oct. 20, 2021 Create an account