1	PRINCIPLES OF ACCOUNTING Free On Board
2	Revenue Recognition Concept Record revenue in the period in which it is earned Fees Revenue is earned when the service is nearly complete AND Sales Revenue is earned when the buyer takes possession of the goods
3	FOB Point
4	Sales Recognition Customers take possession of the goods when the legal title to the goods passes from the seller to the buyer Title usually passes at the FOB POINT So sales are recorded when shipments of goods reach the FOB POINT
5	Importance of FOB Point
6	FOB Destination “FOB Destination” means that the seller pays the entire freight charge all of the way to the customer Goods are “free on board” for the customer because the buyer does not have to pay any freight costs In this case, sales are not recorded until the goods are delivered
7	FOB Shipping Point “FOB Dock” or “FOB Shipping Point” means that at the shipping point the seller merely puts the goods on the truck or railroad car from their loading dock So the buyer pays 100% of freight costs In this case, sales are recorded as soon as the goods are shipped
8	Timing
9	More About Timing
10	FOB Destination Goods were shipped on October 28^th with terms of FOB Destination The order was delivered on November 2^nd Click below on the name of the month in which the sale should be recorded
11	FOB Shipping Point Goods were shipped on March 28^th with terms of FOB Shipping Point The order was delivered on April 1^st Click below on the name of the month in which the sale should be recorded
12	CORRECT!