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:

Embryonic Development

The process through which an embryo forms and develops from fertilization to birth.

Cephalization

Having a well-recognized anterior head with a brain and sensory receptors.

Nematocysts

Specialized cells in the tentacles of cnidarians (such as jellyfish) that discharge a barbed or venomous coiled thread in response to touch.

Cnidarians

A phylum of aquatic invertebrate animals that includes jellyfish, corals, and sea anemones, characterized by their cnidocytes.