A Sales Representative Called on the Smiths at Their Home

question 18

Multiple Choice

A sales representative called on the Smiths at their home to sell them frozen food (steaks, chicken and veal) along with a small freezer for $1000. After a very persuasive sales pitch, the Smiths agreed. Two days later they regretted their decision, contacted the company, and stated that they had decided to rescind the contract and return the food and the freezer. May they?​

• A)No, it was an in-home sale and not unsolicited merchandise.
• B)No, they executed a contract.
• C)No, the Smiths have title to the food and the freezer.
• D)Yes, the three-day in-home sales rule of the FTC allows the Smiths to rescind the contract.

Comprehend the importance of adjusting entries in accurately reporting a company’s financial position and performance.

Recognise the role and impact of errors in adjusting entries on financial statements.

Understand the concept and purpose of adjusting entries in the accounting process.

Identify the types of accounts affected by adjusting entries and their impact on financial statements.

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Definitions:

Unit Basis

A method or metric used to measure, allocate, or assess something on a per-unit basis, often related to pricing or cost calculations.

Traditional Format

A standard or conventional method of presenting data or information, often used in financial reporting or accounting.

Income Statements

A financial statement that records a company's revenues and expenses over a specific period, showing net profit or loss.

Contribution Format

A structure of the income statement that distinguishes between fixed and variable expenses to emphasize the contribution margin.