If a Retailer Orders a Quantity of Merchandise to Be

question 127

Multiple Choice

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.

• A)F.O.B. destination
• B)F.O.B. factory
• C)transfer
• D)postage-stamp
• E)base-point

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Definitions:

Inventories

Items held by a company for the purpose of sale in the ordinary course of business, work in process, or materials to be consumed in the production process.

Historical Cost

The original monetary value of an asset or investment at the time it was acquired or made.

Accounting Equation

The fundamental principle of accounting that states Assets = Liabilities + Equity, balancing a company's financials.

Balance Sheet

A financial record that outlines the assets, liabilities, and owners' equity of a company at a given time.