1.Origin purchase consideration
(a)Origin purchase means the buyer is responsible for freight cost and product risk when the product is in transit.
(b)Depending on the delivery terms, the buyer assumes full risk on inventory at the time of shipment.
(c)Depending on the payment terms, transit inventory would be a part of enterprise’s average inventory and therefore subject to an appropriate charge.
(d)Transportation cost must be added to purchase price to obtain an accurate assessment of the value of goods tied up in inventory.
•After the inventory is received, the amount invested in the product must be increased by transportation expenses.
•Thus, inventory carrying cost should be assessed on the combined cost of the product plus transportation.
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites!
If you want to join us, please mail to email@example.com.