Dictionary / F.O.B. Price
What does F.O.B. Price mean in accounting?
Quick definition
GeneralThe price charged at a specific location. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
Read more below
Examples
Two oak quotes, different FOB points
You run a furniture shop in Boise. On May 4 two mills quote the same truckload of white oak: one mill wants $6,480 FOB Erie (their yard), and the other mill wants $7,110 FOB Boise (your dock). A freight hauler will haul the Erie load for $740, so the cheaper sticker is $7,220 landed. If you take the Erie mill, enter a bill dated May 4 for $6,480 coded to inventory; the $740 posts later as freight-in. Do not treat $6,480 as a delivered price.
FOB Busan is not a CIF price
You run a bike shop in Tucson. On November 19, a hub supplier quotes $4,260 FOB Busan for a crate of hubs: that is the price at their Korean dock, not at Long Beach or your door. Ocean freight and marine insurance are extra; a CIF price to Long Beach would already include those. Enter a bill to that supplier for $4,260, coded to inventory, and post the ocean line and cargo policy as their own bills when they arrive. If you post $4,260 as if it were CIF Long Beach, landed cost is short and the crate is uninsured on the water.
Why it matters
An F.O.B. price is the quoted dollar amount at a named FOB point, so origin dock and destination dock are different numbers because freight sits on one side or the other. You will not see this most months unless you buy or sell goods that ship; it shows up on a purchase order, vendor invoice, or sales quote that lists FOB plus a city or dock. Treat an origin FOB price as a delivered price and inventory misses freight-in, or you argue with a vendor who never agreed to haul it; mix it with a CIF price and you expect marine insurance and ocean freight that were never in the number. Read the named point before you pick the cheaper quote or post the bill.
Further reading
Compare this term with reference material from other accounting and finance websites.
Keep learning
Start with the bookkeeping basics, then compare software when you are ready to pick a tool.
Getting startedBookkeeping basics for small-business ownersWhat bookkeeping is, the records you need, double-entry in plain English, and a monthly rhythm that fits a 1–50 person shop.Updated October 4, 2026
RolesWhat does a bookkeeper do?A bookkeeper records bills, invoices, and bank activity so your books stay current. See the weekly work, the month-end close, and what they do not do.Updated August 18, 2026
Monthly closeMonthly bookkeeping: what to close each monthMonth-end is the job: reconcile banks and cards, age bills and invoices, check payroll, then read the reports. A close checklist for small-business owners.Updated August 18, 2026
Startup BankingThe 5 Best Banks for EU StartupsThe 5 best banks for EU startups, ranked: Wise Business, Revolut, Qonto, bunq, and Finom compared on fees, deposit protection, and honest tradeoffs.Updated August 9, 2026Frequently asked questions
What is F.O.B. Price in bookkeeping?
The price charged at a specific location.
When should I use F.O.B. Price?
Use F.O.B. Price when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with F.O.B. Price?
F.O.B. Price is used for f.o.b. price entries, while F.O.B covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.