When goods are shipped FOB destination:

A. revenue is recognized only after cash payment is received.

B. revenue is recognized when the goods leave the shipping dock.

C. revenue is recognized when the goods are received by the customer.

D. revenue is recognized when the invoice is mailed to the customer.

Question

Fletcher Gillespie

Business

11 January, 21:24

When goods are shipped FOB destination:

A. revenue is recognized only after cash payment is received.

B. revenue is recognized when the goods leave the shipping dock.

C. revenue is recognized when the goods are received by the customer.

D. revenue is recognized when the invoice is mailed to the customer.

+1

Answers (1)

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Chump · Answer 1

The correct answer is C. revenue is recognized when the goods are received by the customer.

Explanation:

In this type of sales, where the sale is agreed at the destination port, the effective sale is registered when all the internal and external processes of export, nationalization and transportation of the merchandise have been overcome. Even before this, you should not recognize the income, since any situation can alter nature and cause a non-existent sale.