A Company Typically Records the Amount Owed to Suppliers for Goods

question 105

Multiple Choice

A company typically records the amount owed to suppliers for goods or services when:

• A)they are ordered.
• B)a verbal commitment to purchase the goods or services has first been made.
• C)payment is made.
• D)the goods or services are received.

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Definitions:

Periodic Inventory System

An inventory accounting system where stock levels and cost of goods sold are determined at the end of an accounting period through a physical count.

Inventory Record

Documentation that tracks the quantity, location, and status of products throughout the supply chain from acquisition to sale.

Inventory Items

These are goods and materials held by a business for the purpose of resale or as inputs in the production process.

Net Sales

The revenue from sales transactions after deducting returns, allowances for damaged or missing goods, and discounts.