Accounting Homework Help?

Whether or not goods in transit should be included in inventory depends on the terms of the contract with the customer. If the goods shipped under the terms "FOB Shipping point", title passed when they left the warehouse (meaning they are technically the property of the receiving customer), and they should not be included. If, on the other hand, the terms were "FOB Destination", then they should be included in inventory because Biggie Company still owns them until they are delivered to the customer. The terms are generally specified on the purchase order or on the contract. Hope that helps. Refer to the link below for a more detailed explanation.