Which of the Following Would Not Be Included in the Merchandise

question 54

Multiple Choice

Which of the following would not be included in the merchandise inventory amount reported on X Company's balance sheet?

• A) Items out on consignment to another company
• B) Items purchased from a supplier and en route directly to a customer of X Company; the term is FOB destination; invoice received but not yet paid
• C) Items shipped today FOB shipping point, invoice has been mailed to the customer
• D) Items in the receiving department of X Company, returned by the customer, invoice has been mailed

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of a business, without controlling it.

Common Shares

Equity investments that represent ownership in a company, giving holders voting rights and a share in the company's profits through dividends.

Equity Method

An accounting method used to assess the profits earned through the investment in another company by updating the investment's value based on the investee's net income or loss.

Journal Entries

The record of financial transactions in an accounting system, entered as debits and credits to various accounts.