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

Question

Quizplus · Accepted Answer

Goods in transit that were purchased FOB shipping point should be included in inventory at the statement of financial position date because ownership of the goods passes from the seller to the buyer at the shipping point. Goods in transit that were purchased FOB destination are not included in inventory until they arrive at the buyer's destination because ownership does not pass to the buyer until the goods are delivered. Goods received from another company for sale on consignment are not owned by the company and therefore should not be included in inventory. Goods sold to a customer that are being held for the customer to call for at his or her convenience are not owned by the company and therefore should not be included in inventory.

Which of the Following Items Should Be Included in Inventory