Which of the Following Should Not Be Included in the Physical

question 142

Multiple Choice

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

• A)Goods held on consignment from another company.
• B)Goods in transit from another company shipped FOB shipping point.
• C)Goods shipped on consignment to another company.
• D)All of these answer choices should be included.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Law of Diminishing Marginal Utility

The principle that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Diminishing Marginal Utility

is an economic principle stating that as a person increases consumption of a product, there is a decline in the additional satisfaction (utility) that person gains from consuming one more unit of the product.

Marginal Utility

The additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a good or service.