Determining Merchandise and Costs to be Included or Excluded from Inventory

Below is a list of items related to merchandising transactions. For each item a through j, indicate whether the item should be included in a year-end balance sheet as inventory or whether the item should be excluded from inventory. If the item should be excluded from inventory, indicate the proper accounting treatment.

Note: If more than one classification applies for an item, list the items in alphabetical order.

a.	Merchandise out on consignment.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
b.	Merchandise purchased, in transit (shipped f.o.b. shipping point).	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
c.	Merchandise purchased, in transit (shipped f.o.b. destination).	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
d.	Merchandise held on consignment.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
e.	Merchandise sold, in transit (shipped f.o.b. destination).	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
f.	Merchandise sold, in transit (shipped f.o.b. shipping point).	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
g.	Freight charges on goods purchased.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
h.	Freight charges on goods sold.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
i.	Merchandise sold by the merchandiser but where the merchandiser agreed to repurchase the merchandise at a certain price.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
j.	Merchandise sold where a 5% return is estimated.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
		AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
k.	Tariffs on imported merchandise inventory to be held for sale.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry
l.	Restoration costs for merchandise inventory damaged by flood.	AnswerCost of goods soldInventoryInventoryEstimated ReturnsOther expenseSelling expenseNo entry