GROUP 6
Accounting for Merchandising
Operations 2
Transportation
by: LadyRochelle Quinte Dimatawaran
Angela Joy A. Guadalupe
Nicole Halcon
Nikki Deluna
Transportation is the means to carry people and goods from
one place to another. This has become very important in each
stage of human civilization. If the present means of
transportation were not developed, situation of the world
would be totally different.
Transportation helps in mass production. Whether it is to
purchase and bring raw materials or it is to distribute finished
goods, one or the other means of transport is necessary. This
expands old markets and creates new ones. As a result,
demands for goods increases and production should also be
increased.
The four main modes of
merchandise transportation
× Road
× Rail
× Sea
× Air
What are the main transportation
means used to transport merchandise?
The four main modes of international transport are
road, sea, rail and air. Each mode has its perks,
drawbacks and conditions pertaining to the type of
goods being exported or imported. Sometimes, there's
a need to use more than one mode of transport, or
you may contact freight forwarders to deal with
logistics.
freight terms
FOB shipping point
VS. FOB destination point
FOB (free on board) shipping point
FOB shipping point, also known as FOB origin,
indicates that the title and responsibility of
goods transfer from the seller to the buyer when
the goods are placed on a delivery vehicle. ...
Therefore, the seller is not responsible for the
goods during delivery.
FOB (free on board) destination point
with FOB destination, the title of ownership is
transferred at the buyer’s loading dock, post office
box, or office building. Once the goods are delivered
to the buyer’s specified location, the title of ownership
of the goods transfers from the seller to the buyer.
Consequently, the seller legally owns the goods and is
responsible for the goods during the shipping process.
always remember...
FOB shipping point
FOB destination point
title is passed to
the buyer at the
point of shipping
/ in transit.
title is passed to the
buyer only when
the buyer recieves
the goods
purchased
freight prepaid
and
freight collect
Freight Collect
means that the consignee or receiver is responsible for the freight
charges
Freight Prepaid
denotes that the shipping charges are the responsibility of the
shipper or consignor.
freight
prepaid
seller
collect
buyer
Consignee
SYNONYMS FOR consignee
A consignee is a person or
company to whom goods is to
be delivered to.
acceptor assignee beneficiary cashier
collector creditor customer grantee heir
recipient subject target
teller
trustee
Consignor
A person or company that consigns goods,
merchandise, etc.
Freight in is the
transportation cost
associated with the
delivery of goods from a
supplier to the receiving
entity
freight IN
and
freight OUT
Freight - IN
Buyer pays for the freight charges.
It is an adjunct account to purchases and thus added as cost of
inventory in bringing it to is present location and condition.
Freight - OUT
Seller pays for the freight charges.
It is recorded by the seller as an operating expense, under the
selling expenses line item.