BU387 Chapter Notes - Chapter 8: Weighted Arithmetic Mean, Perpetual Inventory, Subledger
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Inventories also represent a future benefit, which the entity has control over or access to, and the inventory purchase is the transaction that gives rise to the recognition of an inventory asset. Possession may rest with the consignee but the legal title is held by the consignor, who has the ultimate risk and reward. When the consignee sells the consigned goods, the revenue, less a selling commission and expenses incurred in accomplishing the sale is remitted to the consignor (3) goods sold under buyback agreements. If a contract has been signed for future inventory, nothing is recorded in the books until performance has been rendered by either side: ex. Company a signs a contract in 2016 for a purchase order of inventory in 2017 for the price of. The fair value of the inventory at december 31, 2016 falls to ,000.
