Your customer has received 50 boxes of item A (priced at $10 per box) and these items are transferred to the asset Inventory organization. There are no additional quantities in any of the inventory…

Question

Options

• AItems are not consigned items but ownership is still with the supplier.
• BItems are consigned items and ownership lies with the supplier.
• CItems are consigned and ownership is transferred to "owned".
• DItems are not consigned items and ownership is with the organization.

• A
  3% (1)
• B
  78% (29)
• C
  11% (4)
• D
  8% (3)

Explanation

Option B is correct because consigned inventory items remain the legal property of the supplier even after physical receipt. Since the customer organization does not own the items, they cannot be recognized as an asset on the customer's books - resulting in a $0 valuation despite successful cost accounting and receipt accounting runs. Oracle's receipt accounting treats consigned inventory as a supplier-owned liability, not an owned asset, until a consumption or ownership transfer event occurs.

Why the distractors fail:

• A is contradictory - non-consigned items received into inventory would normally transfer ownership, so claiming supplier ownership without consignment doesn't explain the zero valuation in a standard accounting flow.
• C is the opposite of the problem - if ownership already transferred from consigned to "owned," the system would generate asset accounting entries and valuation would be non-zero.
• D eliminates the issue entirely - organization-owned, non-consigned items would produce the expected $500 valuation (50 × $10), making this the normal scenario with no anomaly to explain.

Memory tip: Use the phrase "Consigned = Companion's goods" - the items are physically with you but legally belong to your supplier-companion. You only record what you own, not what you hold.

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