Determining Merchandise and Costs to Be Included or Excluded from Inventory Below is a list of items related to merchandising transactions of a merchandiser. Required For each item a through I, indicate whether the item should be included in a year-end balance sheet as inventory or whether the item should be excluded from inventory. If the item should be excluded from inventory, indicate the proper accounting treatment. Included in inventory or Other Account or No Entry Merchandise out on consignment. Merchandise purchased, in transit (shipped fo.b. shipping point) Merchandise purchased in transit (shipped fo.b. destination) dMerchandise held on consignment Merchandise sold, in transit (shipped f.o.b. destination). Merchandise sold, in transit (shipped f.o.b. shipping point) Freight charges on goods purchased h Freight charges on goods sold Merchandise sold by the merchandiser where the merchandiser agrees to repurchase the merchandise at a certain price Merchandise sold where a 5% return is estimated Tariffs on imported merchandise inventory to be held for sale Restoration costs for merchandise inventory damaged by flood Cost of goods sold Cost of goods sold and Inventory-Estimated Returns Inventory Other expense Selling expense No entry