FOB Shipping PointShipments between firms may be designated freight on board (FOB) shipping point. This means that ownership transfers to the buyer as soon as the goods are shipped. In this case, goods are considered cost of goods sold by the seller as soon as they depart. The buyer may not recognize goods in inventory until they are received. However, strictly speaking they are in the buyers inventory from the moment they ship.
FOB DestinationFreight on board (FOB) destination are purchase terms that transfer ownership when the buyer receives a shipment. In this case, the goods remain in the seller's inventory until they receive confirmation that the shipment was completed.
|Overview: Goods In Transit|