167k views
4 votes
Which shipping term applies to an arrangement where a seller arranges for transportation to a buyer and pays for the carrier, but then invoices the buyer for the transportation fees?

a) FOB-origin/prepaid
b) FOB-destination/prepaid and allowed
c) FOB-origin/collect
d) FOB-destination/prepaid and charged back
e) FOB-origin/allowed

1 Answer

4 votes

Final answer:

The correct shipping term is FOB-destination/prepaid and charged back, where the seller pays for shipping and then invoices the buyer for these costs.

Step-by-step explanation:

The shipping term that applies to an arrangement where a seller arranges for transportation to a buyer, pays for the carrier, but then invoices the buyer for the transportation fees is d) FOB-destination/prepaid and charged back. FOB stands for “Free On Board” or “Freight On Board” and it indicates when liability and ownership of goods is transferred from a seller to a buyer. With FOB-destination, the seller retains ownership and responsibility for the goods until they are delivered and accepted by the buyer. The term “prepaid and charged back” signifies that the seller initially pays for the shipping cost, but then bills these costs to the buyer.

User Mike Asdf
by
7.9k points