If a Material Amount of Inventory Has Been Ordered Through

question 94

Multiple Choice

If a material amount of inventory has been ordered through a formal purchase contract at the balance sheet date for future delivery at firm prices,

• A) this fact must be disclosed.
• B) disclosure is required only if prices have declined since the date of the order.
• C) disclosure is required only if prices have since risen substantially.
• D) an appropriation of retained earnings is necessary.

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Definitions:

Careful Planning

The process of meticulously organizing actions and tasks ahead of time to achieve a desired goal.

Goods And Services

Products and activities that satisfy human wants or needs, which can be tangible (goods) or intangible (services).

Economists

Individuals dedicated to analyzing the creation, dissemination, and consumption patterns of goods and services.

Decisions

The act of making choices between alternatives to achieve a goal or solve a problem.