Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Inventory Errors

Financial Accounting

5. Inventory

Inventory Errors

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Multiple Choice

Which of the following items is NOT included in inventory on a company's balance sheet?

Work in process inventory

Raw materials awaiting production

Finished goods ready for sale

Goods held on consignment for another company

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Verified step by step guidance

Understand the concept of inventory: Inventory on a company's balance sheet includes items that are owned by the company and are intended for sale or production. These typically include raw materials, work in process, and finished goods.

Review the definition of goods held on consignment: Goods held on consignment are items that a company is storing or selling on behalf of another company. These goods are not owned by the company holding them, and therefore, they are not included in the company's inventory.

Analyze each option: Work in process inventory, raw materials awaiting production, and finished goods ready for sale are all owned by the company and are part of the production or sales process. These items are included in inventory on the balance sheet.

Compare goods held on consignment: Since goods held on consignment are not owned by the company, they do not meet the criteria for inclusion in inventory on the balance sheet.

Conclude the reasoning: The correct answer is 'Goods held on consignment for another company' because these items are not owned by the company and are therefore excluded from inventory on the balance sheet.