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This post addresses Dobbs revenue recording practices.

Dobbs Wholesale Antiques makes all sales under terms of FOB shipping point. The company usually ships inventory to customers approximately one week after receiving the order. For orders received late in December, Kathy Dobbs, the owner, decides when to ship the goods. If profits are already at an acceptable level, Dobbs delays shipment until January. If profits for the current year are lagging behind expectations, Dobbs ships the goods during December.

Requirements:
Under Dobbs' FOB policy, when should the company record a sale?

Do you approve or disapprove of Dobbs' manner of deciding when to ship goods to customers and record the sales revenue? If you approve, give your reason. If you disapprove, identify a better way to decide when to ship goods. (There is no accounting rule against Dobbs' practice.)

Solution Preview

Under Dobbs' FOB policy, when should the company record a sale? Do you approve or disapprove of Dobbs' manner of deciding when to ship goods to customers and record the sales revenue? If you approve, give your reason. If you disapprove, identify a better way to decide when to ship goods. (There is no accounting rule against Dobbs' ...

Solution Summary

The solution explains when Dobbs should record a sale under the terms of their FOB policy and also discusses if you should approve or disapprove of Dobbs' manner of deciding when to ship goods to customers and record the sales revenue, along with reasons cited and identifies better ways of deciding when to ship goods.

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