What does the term “free on board” mean? Why is this an important term to understand if you are involved in making decisions about the purchasing of inventory or the setting of prices for your products?
Answer to relevant QuestionsWhat is the difference between a single-step and multi-step income statement? For what type of business is a multi-step income statement most appropriate? Charleston's Furniture uses the perpetual inventory method. At the end of the year, Charleston’s Furniture’s Inventory account had a ledger balance of $87,000. A physical inventory count revealed that the actual ...Suppose Peter's Hardware sells merchandise on account, terms 2/10, n/45, for $750 (cost of the inventory is $460) on May 17, 2013. Peter’s Hardware later received $225 of goods (cost, $140) as sales returns on May 21, ...The following transactions occurred during April 2013 for Angelo’s Garden Centre, Inc.: Apr 3 Purchased $3,500 of goods on account, terms 2/10, n/30, FOB shipping point. 6 Returned $400 of defective merchandise purchased ...On November 14, 2013, Amazing Sound, Inc. sold $3,100 of inventory (cost is $1,330) on account to one of its customers. The terms were 3/10, n/30, FOB destination. On November 16, Amazing Sound, Inc. paid freight charges of ...
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