When an Acquisition Is on an FOB Origin Basis, the Inventory

question 55

Multiple Choice

When an acquisition is on an FOB origin basis, the inventory and related accounts payable must be recorded in the current period if the goods were

• A) received prior to the balance sheet date.
• B) shipped on or before the balance sheet date.
• C) both shipped and received prior to the balance sheet date.
• D) paid for in advance.

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Definitions:

Landslide

The sudden and rapid movement of a large amount of earth material, such as rock and soil, downslope due to gravity.

Unconformity

A surface of erosion or non-deposition that separates younger strata from older rocks, indicating a gap in the geologic record.

Conglomerate

A conglomerate is a coarse-grained sedimentary rock composed of rounded fragments larger than 2 mm in diameter, embedded in a matrix of finer particles and cement.

Shale Layer

A shale layer is a sedimentary rock formation characterized by fine-grained clay particles, often found in various geological strata and known for being a source of oil and natural gas through hydraulic fracturing.