To Derive the Raw Material to Purchase During an Accounting

question 4

Multiple Choice

To derive the raw material to purchase during an accounting period, an accountant would calculate the raw material required for production and then:

• A) add the beginning raw-material inventory and the desired ending raw-material inventory.
• B) subtract the beginning raw-material inventory and the desired ending raw-material inventory.
• C) add the beginning raw-material inventory and subtract the desired ending raw-material inventory.
• D) add the desired ending raw-material inventory and subtract the beginning raw-material inventory.
• E) add the desired ending raw-material inventory and subtract both the beginning raw-material inventory and the expected units to be sold.

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Definitions:

Firm Offer

A firm offer is a binding proposal in contract law that cannot be withdrawn for a certain period of time by the offering party.

Breach of Contract

The failure to perform any term of a contract, written or oral, without a legitimate legal excuse.

Merchant

An individual or business involved in the wholesale or retail sale of goods.

Firm Offer

A proposal in business transactions that remains valid for a specified period and cannot be revoked during that time.