Which of the Following Is Correct

question 41

Multiple Choice

Which of the following is correct?

• A) Goods on consignment are included in the consignee's inventory.
• B) Goods on consignment are included in the consignor's inventory.
• C) The consignee essentially has the risks and rewards of ownership.
• D) Inventory on consignment is always shown in a separate account.

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Definitions:

Receivables Period

The receivables period is the average amount of time it takes for a company to receive payments owed by its customers for goods or services sold on credit.

Payables Period

The length of time a company takes to pay its invoices to suppliers, reflecting its payment policy's efficiency.

Accounts Receivable Balance

The sum total of debts customers have towards a company for delivered goods or services which have not been paid for yet.

Wholesale Cost

The price charged for a product by the wholesaler, which is typically lower than the retail price.