When an Acquisition Is on an FOB Origin Basis, the Inventory

question 56

Multiple Choice

When an acquisition is on an FOB origin basis, the inventory and related accounts payable must be recorded in the current period if the goods were:

• A) paid for in advance.
• B) both shipped and received prior to the balance sheet date.
• C) received prior to the balance sheet date.
• D) shipped prior to the balance sheet date.

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Definitions:

Opportunity Loss

The loss of potential gain from other alternatives when one alternative is chosen.

Decision Maker's Profit

Reflects the gains realized by a decision maker after considering all costs and revenues associated with their decision.

Expected Monetary Value(EMV)

A financial concept used in decision-making to calculate the average outcome of future events, taking into account the probabilities and impacts of various possible outcomes.

State of Nature

A term referring to the possible outcomes or conditions in decision making that are not under the control of the decision-maker.