Final answer:
Inventory purchased on account with FOB shipping point terms means that the buyer records the inventory upon shipment and is responsible for shipping costs.
Step-by-step explanation:
When a purchase of inventory is made on account with credit terms that specify FOB shipping point, this means that the buyer is responsible for the goods and the shipping costs from the point the goods are shipped. Therefore, the inventory is recorded on the buyer’s books when the goods leave the seller’s warehouse, and transportation costs are typically also recorded as an expense by the buyer. The term ‘on account’ indicates that the purchase is made using credit, and the buyer will pay the seller at a later date as per the credit agreement terms.