Which of the Following Transactions Is Considered a Purchase of Final

question 196

Essay

Which of the following transactions is considered a purchase of final output? Which one is considered the purchase of an intermediate good?
(a)Albert purchased a camera from the U.S.to use on his vacation in the Bahamas.
(b)Albert purchased a roll of film to use in his camera.
(c)An owner of a bakery purchased wheat to make bread.
(d)A chocolate factory purchased milk to make chocolate.
(e)The Ford Company purchased 10 tons of steel to make cars.
(f)Sue purchased cleaning detergent to use in her newly purchased washing machine.
(g)Karen bought tomato seeds and planted them in her backyard for her own use.

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Definitions:

Amortization Expense

The periodic allocation of the cost of an intangible asset over its useful life.

Operating Activities

Operating Activities refer to the primary revenue-generating activities of a company, such as sales and service provision, and their related expenditures.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or loss of value over time.