Which of the following is correct?
A) Inventory that is held by an agent for sale on consignment but is owned by a principal is included in the inventory of the principal
B) Inventory sold under hire purchase is normally treated as an asset of the buyer even though it is owned by the seller
C) Both are correct
D) Neither is correct

Question

Quizplus · Accepted Answer

Both statements are correct. A) Inventory on consignment remains the property of the principal until sold, thus it is included in the principal's inventory. B) In a hire purchase agreement, the buyer recognizes the asset as theirs and includes it in their balance sheet, even though legal title may not transfer until the final payment.

Which of the Following Is Correct