Which of the following goods would not be included in merchandise inventory for a purchasing company?
A)Goods in transit shipped FOB shipping point
B)Goods on hand in the showroom
C)Goods in transit shipped FOB destination
D)Goods ordered and received from the supplier

Question

Quizplus · Accepted Answer

Goods in transit shipped FOB destination would not be included in merchandise inventory because ownership does not transfer until the goods reach the buyer's location. Therefore, they are not yet owned by the purchasing company and should not be included in their inventory. Goods shipped FOB shipping point, goods on hand in the showroom, and goods ordered and received from the supplier would all be included in merchandise inventory.

Which of the Following Goods Would Not Be Included in Merchandise