[lseymour9586]

X sold Y merchandise on account FOB shipping point, 2/10, net 30 for $10,000.00. X prepaid the $200. Shipping charge. What entries will Y make if Y pays within the discount period?

I am confuse with x paying the prepaid shipping charge because I understand
FOB shipping is the byer's responsibility. Please help

[morgaine300]

Even order anything mail order or online? Generally you would be responsible for the shipping charges. But the seller actually pays the charges to the shipper, and then you pay that seller cause it's added to the invoice. (Unless you spend over $25 at Amazon... but never mind. :-))

That's what is happening here. The buyer is responsible for the charges, but the seller is paying the shipper as it is shipped and then adding it to the invoice for the buyer to pay back. So the invoice includes the merchandise and the shipping charges. (i.e. the receivable and the payable will include the shipping.) However, as a general rule, there is no discount on the shipping charges, only the merchandise. But that's something you should check your book on and make sure of.

Does that help?

[delite]

You are quire right. However when you have a separate potrion of 200 in prepaid charges this is separate from the fob clause wherein when the goods reach the ship title is yours