Final answer:
Nichols Company will recognize sales revenue under FOB shipping point terms when the goods leave its shipping dock, as that is the point where ownership transfers to the buyer.
The correct answer is a. the goods leave Nichols' shipping dock.
Step-by-step explanation:
The student's question pertains to the point in time when a company recognizes sales revenue under a specific delivery term, which is FOB (Free On Board) shipping point.
FOB shipping point means that the sale is considered to be completed at the seller's shipping dock, and thus, the seller should recognize the revenue at that time. This is because under the terms of FOB shipping point, the ownership and responsibility of the goods transfer to the buyer the moment the goods leave the seller's facility, and the revenue is recognized by the seller at that same point.
Therefore, the correct option for when Nichols Company will recognize sales revenue is a. the goods leave Nichols' shipping dock.