Which Goods in Transit Would Be Recorded in Inventory at Year

question 111

Multiple Choice

Which goods in transit would be recorded in inventory at year end?

• A)Goods purchased with terms F.O.B. destination point that were received after year end.
• B)Goods purchased with terms F.O.B. shipping point that were received after year end.
• C)Goods sold F.O.B. shipping point that were shipped two weeks before year end.
• D)Goods returned for credit, with terms F.O.B. destination point, received two days after year end.

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Definitions:

Straight-Line Depreciation

A method of calculating the depreciation of an asset, dividing its cost minus salvage value by its useful life, resulting in equal annual depreciation expenses.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.

Present Value Index

A calculation that compares the present value of cash inflows to the initial investment, often used in capital budgeting.

Compound Interest

The calculation of interest on the initial principal and also on the accumulated interest of previous periods.