Fact Pattern 14-3 Alain and Brie Sign a Contract for the Sale

question 50

Multiple Choice

Fact Pattern 14-3 Alain and Brie sign a contract for the sale of Alain's Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement-Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.
Refer to Fact Pattern 14-3. Brie later disputes some of the provisions of the deal with Alain. If the dispute results in litigation, a court will most likely admit evidence of additional terms that are

• A) ambiguous .
• B) consistent.
• C) contradictory.
• D) clear.

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Definitions:

FOB Shipping Point

A term indicating that the buyer assumes responsibility for the goods and the costs of transportation at the point of departure from the seller's shipping dock.

Ending Inventory

At the close of an accounting period, the value of products available for sale is calculated by taking the initial inventory, adding any purchases, and then deducting the cost of goods sold.

Cost Flow Assumption

An accounting method that determines the cost of goods sold and ending inventory valuation, examples include FIFO, LIFO, and weighted average.

LIFO

Last In, First Out, is an inventory valuation method assuming that goods purchased last are the first to be sold.