1. Tim Co. sold merchandise to its customer, Nader, Inc. The terms of the sale specified FOB Shipping Point, meaning that

- ownership of goods would pass to Nader when the public carrier (such as FedEx) accepted the shipment from Tim.

- Tim should pay the shipping costs

- the public carrier (FedEx) owns the goods while they are on the truck

- ownership of the goods would pass to Nader when the public carrier (such as FedEx) delivered the goods to Nader.

2. Northern waves co. sells surfboards and other beach gear. On 11/1, the company purchases on account an inventory of 200 surfboards at a total cost of $20,000. On 11/9, Northern Waves asks its vendor for a $1,000 allowance on the surfboards (Northern waves has not paid for the surfboards yet). To correctly record the allowance, Northern Waves should

- debit accounts payable and credit inventory

- debit cash and credit accounts payable

- no entry is required because with a n allowance no surfboards are actually removed

- debit cash and credit inventory