Inventory shipped FOB destination and in transit on the last day of the year should be included in:

a.the inventory balance of the seller.

b.the inventory balance of the buyer.

c.neither the inventory balance of the buyer or the seller.

d.both the inventory balance of the buyer and the seller.

Acme Company's balance sheet shows three inventory accountsraw materials, work in process, and finished goods. Acme Company must be a:

a.manufacturer.

b.merchandiser.

c.service business.

d.wholesale distributor.

Goods placed in inventory are initially recorded at:

a.market value.

b.the amount paid to acquire the asset.

c.the amount paid to prepare the asset for sale to customers.

d.the amount paid to acquire the asset and prepare it for sale.