Question

who is the buyer or seller ? you are an accounting student at Berkeley College and will not graduate for another year. But because of your excellent grades so far, you have been able to land a job in the purchasing department of a retailer. One of the purchasing agents in your company is negotiating for the receipt of a very large order of uninsured goods from a supplier. The purchasing agent is able to get a better deal on the goods if they are shipped FOB shipping point rather than FOB destination. The agent doesn’t know the difference between these two concepts. He also doesn’t understand why choosing one over the other should make any difference to the company. As a student of accounting at Berkeley College, you know well the difference between these 2 concepts and you know why one would be a better choice over the other in the case of uninsured goods. Please explain these two concepts in this discussion and tell the purchasing agent which shipping method is preferable and why. In addition to your response, please comment to at least one classmate’s post including information from Chapter 6 in your eText.

Answer 1

Buger 0 soy - A buyer is any person who contracts to acquire an asset or senvice in return for some form of condition & A buyen is a person who purchase finished goods typically for resale 1017 A person who purichases material cesed to make goods is called a punchasing agent. Sellen In The Seller is the person who is selling v EP something to someone else.. oke L2 FOB Shipping Point, - It means the buyer the Sueen's the title of as soon as Warehouse. the the goods passes to shipment Leaves 77 The the sellen goods should record the Leave wonehouse. sale when - The buyer must bear the delivery Charges- The goods in transit should be reported as a purchase and as inventory by the bag buyer

FOB Destination It means the buyer owns the title of the goods once it arrives at the buyer's dock. - with the sellere & - The ownenship during the title nests transit e) The to seller will incur get the goods to the the delivery expense. destination. The term FOB 2 Shipping point and FOB destination have significance in accounting because they determine the following. La Calhen a sale of goods and the related receivable occur rolin all the • Calthen the purchase of goods and the related liabinity occur. Calhethen the selen on buyer pays the Shipping cost. - bathen the risk on goods will transfer to do the buyendoj. tgo In case of receipt of a very large order of uninsuned goods from a supplier, the FOB destination coould be a better choice oven the other

Reason: The set of onder is very longe. Also the goods are not insured . POTK TOBShipping pocht is considened. , then Panchase will be considened at the seller's warehouse. . Transportation Changes will be paid by 1000 the company as well as risk of transpont- ation will be with the company to IK FOB destination is considered - 30 post Purchase will be considened at thende time when it anrived at the company's dock bisin Transportation by the seller Change . n. will be paid Risk of transpontation the sellen of goods is with o As the goods better to opt are for not FOB insuned, it's destination groot