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8 Cards in this Set
- Front
- Back
Items should be included in a company's inventory if they are being helf for sale and the company has complete and unrestricted ownership. Purchases shoudl be recorded when legal title to the items passes from the seller to the buyet.
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General Rule
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Goods owned by one party (consignor), but held for sale by another party (consignee).
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Goods on Consignment
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Items not in the physical possession of either buyer or seller as of a point in time because the goods are in transit from the seller to the buyer.
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Goods in Transit
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Indicates that the seller is responsible for the goods only to the point from which they are shipped
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FOB(free on board) shipping point
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Indicates that the seller is responsible for the goods all the way to their destination
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FOB(free on board) destination
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Indirect materials, indirect labor, depreciation of fixed assets, and utility and insurance costs
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overhead costs
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Sears, Wal Mart, JC Penny's purchase inventories and sell them for prices that exceed their cost are called
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Retail Companies
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IBM, GE, Johnson & Johnson purchase raw materials and use processes involving labor and other costs to manufacture their inventories
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Manufacturing Companies
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