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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Goods on consignment should be included in the inventory of:

  1. a. the consignor but not the consignee
  2. b. both the consignor and the consignee
  3. c. the consignee but not the consignor
  4. d. neither the consignor nor the consignee

To determine

Identify in whose inventory must the goods in consignment be included.

Explanation

The cost of the consigned goods is included by the consignor in their inventory as they hold the economic control and ownership on the consigned goods.

Option (a):

The goods on consignment should be included in the inventory of the consignor but not the consignee. Therefore, Option a, is the correct answer.

Option (b):

The goods on consignment should be included in the inventory of the consignor and not in the both the consignor and consignee...

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