Which of the Following Is a Contract with a Condition

question 52

Multiple Choice

Which of the following is a contract with a condition subsequent?

• A) Roger bought a VCR but he may return the VCR within ten days and get all of his money back.
• B) Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank.
• C) Both (a) and (b) are examples of a condition subsequent.
• D) Neither (a) nor (b) is an example of a condition subsequent.

Identify the costs included in the inventory of a manufacturer.

Analyze the effects of changes in inventory levels on cash flow from operating activities.

Evaluate the impact of inventory costing methods on financial statements under varying cost conditions.

Understand the fundamental principles of inventory management and controls.

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Definitions:

Ending Inventory

The total value of all inventory a company has in stock at the end of an accounting period.

Variable Production Costs

Costs that vary in proportion to the level of production or business activity.

Variable Costing

An accounting method that only takes into account the variable production costs (direct materials, direct labor, and variable manufacturing overhead) when calculating product cost.

Period Cost

Expenses that are not directly tied to production and are expensed in the period they are incurred, such as selling, general, and administrative expenses.