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Identify the items that are included in merchandise inventory.

Identify the items that are included in merchandise inventory. (In your answer address the special situations of goods in transit, consigned goods, and damaged goods.)

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The items that are included in merchandise inventory are those items for which you have legal title (Inventory Valuation, 2011). There are a number of factors to consider when deciding what to include and exclude, including the incoming purchases and outgoing items sold. Let's work with the incoming and outgoing separately.

For incoming, the issues controlling whether you have received title, and therefore should include it, include the shipping terms (FOB shipping point or FOB destination) and whether all the costs are properly accumulated (taxes, incoming freight costs, insurance during transit and so forth) (Kiese, Weygandt, & Warfield, 2012). Generally, if the items ...

Solution Summary

Your tutorial is 403 words plus two references and discusses what is included from the viewpoint of incoming purchases and outgoing sales of merchandise inventory.

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