Which of the following items should be included in inventory at the balance sheet date?
A)goods in transit which were purchased FOB destination
B)goods received from another company for sale on consignment
C)goods sold to a customer, which are being held for the customer to call for at his or her convenience
D)goods in transit which were purchased FOB shipping point

Question

Quizplus · Accepted Answer

Goods in transit should be included in inventory if they were purchased FOB shipping point, as the title and risks of ownership have passed to the buyer. Goods purchased FOB destination remain the seller's responsibility until they reach their destination, and should not be included in inventory until they arrive. Goods received from another company on consignment and goods sold to a customer being held for pickup are not owned by the company and should not be included in inventory.

Which of the Following Items Should Be Included in Inventory