How Is a Significant Amount of Consignment Inventory Reported in the Balance

question 171

Multiple Choice

How is a significant amount of consignment inventory reported in the balance sheet?

• A) The inventory is reported separately on the consignor's balance sheet.
• B) The inventory is combined with other inventory on the consignor's balance sheet.
• C) The inventory is reported separately on the consignee's balance sheet.
• D) The inventory is combined with other inventory on the consignee's balance sheet.

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Definitions:

360-Day Year

A 360-day year is an accounting practice that treats each month as having 30 days, simplifying interest calculations in the financial industry.

Total Amount

The aggregate sum resulting from the addition of numbers, amounts, objects, etc.

Ordinary Interest

Interest calculation based on a 360-day year, often used in banking and finance, as opposed to real interest which is based on a 365-day year.

Exact Interest

Interest calculated based on a 365-day year or actual number of days in a loan term, providing a precise calculation of interest charges.