chapter 6 final - CHAPTER 6 Items have two common...

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CHAPTER 6 Items have two common characteristics: (1) They are owned by the company, and (2) they are in a form ready for sale to customers in the ordinary course of business Under a just-in-time method, companies manufacture or purchase goods just in time for use. No matter whether they are using a periodic or perpetual inventory system, all companies need to determine inventory quantities at the end of the accounting period Determining inventory quantities involves two steps: (1) taking a physical inventory of goods on hand and (2) determining the ownership of goods. One challenge in determining inventory quantities is making sure a company owns the inventory. Goods in transit should be included in the inventory of the company that has legal title to the goods. In some lines of business, it is common to hold the goods of other parties and try to sell the goods for them for a fee, but without taking ownership of the goods. These are called consigned goods . The
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chapter 6 final - CHAPTER 6 Items have two common...

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