Asked by WORST NIGHTMARE on May 08, 2024
Verified
The factor which determines whether or not goods should be included in a physical count of inventory is
A) physical possession.
B) legal title.
C) management's judgment.
D) whether or not the purchase price has been paid.
Physical Possession
The actual holding or occupying of an object, property, or asset by an individual or entity.
Legal Title
Refers to the formal right of ownership of a property or asset.
Physical Count
The process of manually counting the actual inventory on hand at a certain period to verify the quantities listed in the accounting records.
- Define and apply the concept of legal title and its impact on inventory accounting.
Verified Answer
KN
Kumari NeelamMay 09, 2024
Final Answer :
B
Explanation :
Legal title determines whether or not goods should be included in a physical count of inventory because it indicates the ownership of the goods. Ownership is crucial for inventory accounting, regardless of physical possession or payment status.
Learning Objectives
- Define and apply the concept of legal title and its impact on inventory accounting.