BAT CH6 01

The factor which determines whether or not goods should be included in a physical count of inventory is

• physical possession.
• legal title.
• management's judgement.
• whether or not the purchase price has been paid.

If goods in transit are shipped FOB shipping point by a carrier named by the buyer

• the seller has legal title to the goods until they are delivered.
• the buyer has legal title to the goods when a public carrier accepts the goods from the seller.
• the transportation company has legal title to the goods while the goods are in transit.
• no one has legal title to the goods until they are delivered.

If goods in transit are shipped FOB destination

• the seller has legal title to the goods until they are delivered.
• the buyer has legal title to the goods when a public carrier accepts the goods from the seller.
• the transportation company has legal title to the goods while the goods are in transit.
• no one has legal title to the goods until they are delivered.

Per its January 31, 2009 physical inventory count, Yager Company has $49,000 in inventory on hand at year end. In addition, at year end the company has $2,400 in merchandise in transit purchased from a supplier shipped FOB destination. Included in its physical inventory is $1,800 in goods held on consignment from a local manufacturer. How much inventory should be reported on the company’s January 31, 2009 balance sheet?

• 49000
• 51400
• 49600
• 47200

An employee assigned to counting computer monitors in boxes should

• estimate the number if there are a large quantity to be counted.
• read each box and rely on the box description for the contents.
• open each box and check that the box contains a monitor.
• rely on the warehouse records of the number of computer monitors.

After the physical inventory is completed,

• quantities are listed on inventory summary sheets.
• quantities are entered into various general ledger inventory accounts.
• the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets.
• unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs.

All of the following can be involved in taking a physical inventory count except

• counting.
• measuring.
• storing.
• weighing.

Westcoe Company's goods in transit at December 31 include sales made: (1) FOB destination; (2) FOB shipping point; and purchases made: (3) FOB destination; (4) FOB shipping point. Which items should be included in Westcoe's inventory at December 31?

• (2) and (3)
• (1) and (4)
• (1) and (3)
• (2) and (4)

The term "FOB" denotes

• free on board.
• freight on board.
• free only (to) buyer.
• freight charge on buyer.

Under a consignment arrangement, the

• consignor has ownership until goods are sold to a customer.
• consignor has ownership until goods are shipped to the consignee.
• consignee has ownership when the goods are in the consignee's possession.
• consigned goods are included in the inventory of the consignee.