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

Physical Inventory Count, Ownership of Goods, and Consigned Goods

Financial Accounting

5. Inventory

Physical Inventory Count, Ownership of Goods, and Consigned Goods

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following would NOT be included in the ending inventory of the seller?

Goods held on consignment for another company

Goods in transit to customers shipped FOB destination

Goods in the seller's warehouse awaiting sale

Goods purchased and received but not yet paid for

Previous problemNext problem

Verified step by step guidance

Understand the concept of ending inventory: Ending inventory refers to the goods that a company has on hand at the end of an accounting period, which are available for sale or use.

Review the treatment of consigned goods: Goods held on consignment for another company are not owned by the seller. They are owned by the consignor (the company that sent the goods), so they should not be included in the seller's ending inventory.

Analyze goods in transit shipped FOB destination: Under FOB (Free on Board) destination terms, ownership of goods transfers to the buyer only when the goods reach their destination. Therefore, goods in transit to customers under FOB destination terms are still owned by the seller and should be included in the seller's ending inventory.

Evaluate goods in the seller's warehouse awaiting sale: These goods are physically present in the seller's warehouse and are owned by the seller. As such, they should be included in the ending inventory.

Consider goods purchased and received but not yet paid for: Ownership of goods typically transfers to the buyer upon receipt, regardless of whether payment has been made. Therefore, these goods should be included in the seller's ending inventory.