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

question 90

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 prior to 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:

Junior Partner

A partner in a firm who has less responsibility, power, or seniority than senior partners.

Damage Award

A compensation amount determined by a court to be paid to a plaintiff who has suffered loss or harm due to the defendant's actions.

Drudgery

Tedious, dull, or hard work that is often demeaning and exhausting.

Production

The process of creating goods and services through the combination of labor, materials, and technology.