Transportation In Vs Out Costs

delivery

Watch this YouTube video to better understand the difference between FOB shipping point and destination https://www.youtube.com/watch?v=jJL-_mBKfkU

In summary, when the buyer pays for the inventory it is FOB shipping point and it is included in merchandise inventory. On the other hand, when the seller pays for the inventory it is FOB destination and it is transportation out (an operating expense).