Question

Abbey Company completed the annual count of its inventory. During the count, certain items were identified as requiring special attention. Decide how each item would be handled for Abbey Company's inventory.

Answer 1

Answer:

Here is the complete question with options: Abbey Company completed the annual count of its inventory. During the count, certain items were identified as requiring special attention. Decide how each item would be handled for Abbey Company's inventory.

item#1: Goods in transit shipped to Abbey(Purchaser) FOB destination:

item#2: Goods in transit shipped to Abbey(purchaser) FOB shipping point.

item#3: Goods in transit shipped by Abbey(seller) FOB destination.

item#4: Goods in transit shipped by Abbey(seller) shipping point.

Now, checking how these items are handled by Abbey company´s inventory.

item#1: Goods in transit shipped to Abbey(purchaser) FOB destination: Excluded from inventory as goods has not arrived to the buyer´s place, therefore, ownership will not be transferred.

item#2: Goods in transit shipped to Abbey FOB (purchaser) shipping point: Included in inventory as goods are shipped to shipping point, so ownership will be transferred if carrier accept the goods from the seller.

item#3: Goods in transit shipped by Abbey FOB(seller) destination: Included in the inventory as Abbey owns the goods while goods is in transit.

item#4: Goods in transit shipped by Abbey(seller) shipping point: Excluded from inventory as a seller, Ownership has been transferred from Abbey.