Question

Which of the following should not be included in the physical inventory of a company? Goods in transit from another company shipped FOB shipping point. All of these answer choices should be included. Goods shipped on consignment to another company. Goods held on consignment from another company.

Answer 1

Answer:

Goods held on consignment from another company.

Explanation:

Inventory is the stock of finished goods and goods for production that a company owns and uses to meet customer needs. It is classified as a current asset of the company.

When goods are held on consignment, they are not included in physical inventory of the company because when goods are consigned the owner of the goods is giving them to over to another person's care. But the owner retains legal right to the goods till they are sold.