ACC 311 Lecture Notes - Lecture 12: Consignee, Consignor, Accounts Payable

• School: University of Miami
• Department: Accounting Business Administration
• Course: ACC 311
• Professor: andrewmcmartin

Document Summary

Fob shipping point: title passes once supplier ships good. Fob destination: title passes only when goods are delivered. Consignee makes no entry to inventory account for goods received. Record sales revenue at amount it expects to receive from transaction. Establish estimated inventory return account to recognize that some of its textbooks will be returned. ** if returns are unpredictable/uncertain, don"t record textbooks as sold and shouldn"t remove goods from its inventory ** Costs that attach to the inventory; recorded in inventory. Indirectly related to acquisition or production of goods. Selling expenses, g&a expenses; not included as inventory. Fasb ruled that companies should capitalize interest costs related to assets constructed for internal use or assets produced as discrete projects for sale or lease. Company is reporting its purchases and accounts payable at gross amount. Another approach is at amount net of cash discounts. Considers purchase discounts lost as a financial expense and reports it in.