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Lecture Documents Accounting - HAUL LOAD AND Delivery Mechanism
Intro To Accounting (AC 210)
University of Alabama
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HAUL LOAD AND DELIVERY MECHANISM
Because the process of selling merchandise must be related to shipping costs and shipping responsibilities, generally sales transactions are grouped into two, namely: 1. Free on Board-Shipping Point (FOB-Shipping Point) is a transaction for the sale of trading goods in which the transfer of ownership rights to the trading goods is carried out in the seller's warehouse. Consequently, the entire burden of shipping merchandise from the seller's warehouse to the buyer's warehouse is borne by the buyer. That means if the sales transaction is done using FOB-Shipping Point, then the shipping cost is not recorded and in the journal by the seller. Instead, the buyer must record and Journal the shipping costs in his journal. As a result, the purchase price of the merchandise will increase by the cost of shipping. For example, PT. MDN, located in Jakarta, Sells in cash merchandise that has a BPP of Rp196, 000, 000 for Rp222. 000,000 to PT. Anggrek located in Surabaya. The cost of shipping the merchandise from Jakarta to Surabaya is Rp8, 000, 000 it is agreed that the sales transaction uses FOB- Shipping Point, so that the sales transaction of the merchandise needs to be kept a journal as follows : Journal recording method seller buyer periodic cash 222,000,000 sales 222,000,000 purchase 222,000,000 freight load 8,000,000 cash 230,000,000 Perpetual 222,000,000 BPP 196,000,000 sales 222,000,000 inventory 196,000,000 inventory 230,000,000 cash 230,000,000 2. Free on Board- Destination (FOB-Destination) is a transaction of sale of merchandise in which the transfer of ownership of the merchandise is carried out in the buyer's
warehouse. Consequently, the entire burden of shipping merchandise from the seller's warehouse to the buyer's warehouse is borne by the seller. If the sales transaction uses FOB-Destination, then the shipping costs are not recorded at all and in the journal by the buyer. Instead, the seller must record and Journal the shipping expense into his journal. That means the burden of shipping is on the seller. and become part of the operating expenses that must be incurred in the period, and which will result in a reduction in the operating profit of the selling company in the company concerned. For example, PT. MDN, located in Jakarta, Sells in cash goods that have a BPP of Rp196, 000, 000 for Rp222, 000, 000 to PT. Anggrek located in Surabaya. The cost of shipping the merchandise from Jakarta to Surabaya is Rp8, 000, 000. It was agreed that the sales transaction was carried out using FOB-Destination, so that the sales transaction needs to be kept a journal as follows: Journal recording method seller buyer periodic cash 222,000,000 sales 222,000,000 purchases 222,000,000 cash 222,000, Perpetual cash 222,000,000 BPP 196,000,000 sales 222,000,000 inventory 196,000,000 inventory 230,000,000 cash 230,000,000 two models of sales transactions where shipping costs are borne by the buyer or seller will affect the records and journals that must be made by the seller and buyer. If the sales transaction uses FOB-Shipping Point, then the shipping cost is not recorded and in the journal by the seller. Instead, the buyer must record and Journal the shipping costs into his journal. That means the purchase price of merchandise will increase. If the sales transaction uses FOB Destination, then the shipping cost is not recorded and journaled by the buyer. Instead, the seller must record and Journal
Lecture Documents Accounting - HAUL LOAD AND Delivery Mechanism
Course: Intro To Accounting (AC 210)
University: University of Alabama
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