Which of the Following Should Not Be Included in the Inventory

question 68

Multiple Choice

Which of the following should not be included in the inventory of a company using GAAP?

• A) None of these answer choices are correct.
• B) Goods in transit from another company shipped FOB shipping point.
• C) Goods shipped on consignment to another company.
• D) Goods held on consignment from another company.

---

Definitions:

Liquidation

The process of closing a business, selling its assets, and using the proceeds to pay off its debts.

Reorganization

A process aimed at restructuring a company's operations, structure, or finances with the goal of increasing efficiency or preparing for growth, often to avoid bankruptcy.

Order for Relief

A court order that occurs when a petition for bankruptcy is approved, protecting the petitioner from creditors and potentially leading to a debt reorganization plan.

Debtor in Possession

A debtor in possession is a status in bankruptcy proceedings where a debtor continues to control property and operate its business under the oversight of the court.