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AccountingTermsDictionary |
| U.S. GAAP Codification | Accounting Topics |
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Accounting Terms Dictionary |
| Principles of Accounting, U.S. GAAP Financial Reporting Guide |
| Accounting by Topic, Accounting Terms Dictionary |
| Accounting Terms Dictionary |
| Consigned goods |
| Consigned goods 1. Consignment contract --> Consignor sends goods to consignee --> Consignor continues to own consigned goods 2. Physical location of consigned goods --> Consigned goods are located in the warehouse of consignee 3. Ownership of consigned goods --> Ownership of consigned goods belongs to consignor 4. Inventory counting --> Consignor should include consigned goods in the inventory --> even if consigned goods are currently located in the warehouse of consignee 5. Consignee should exclude consigned goods from the inventory --> even if consigned goods are currently located in the warehouse of consignee 6. Example 1 On December 20, 2011 --> Entity A sent 200 units of its products to Entity B for consignment sales On December 31, 2011 -->Entity A counted 500 units of its products in their warehouses What is the number of units to be reported as Entity A's inventory at December 31, 2011? Answer: 700 units (500 units on hand + 200 units of consigned goods) 7. Example 2 On December 20, 2011 --> Entity A sent 200 units of its products to Entity B for consignment sales On December 31, 2011 --> Entity B counted 500 units of products in their warehouses, including consigned goods What is the number of units to be reported as Entity B's inventory at December 31, 2011? Answer: 300 units (500 units on hand - 200 units of consigned goods) |
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