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Cybermakers Has Contracted with a Computer Chip Manufacturer to Buy

question 25

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Cybermakers has contracted with a computer chip manufacturer to buy a quantity of computer chips for delivery the following month.These computer chips are in the seller's warehouse,and the contract's shipping terms are F.O.B shipping point.At this point,prior to the chips being shipped,who has an insurable interest in the computer chips?


Definitions:

Inventory of Supplies

The total value of supplies held by a company that are yet to be used in production or sold.

Supplies Account

An account used to track the cost of supplies used by a business during an accounting period.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the correct accounting periods, ensuring the financial statements are in accordance with the accrual basis of accounting.

Annual Accounting Period

A 12-month timeframe over which a company measures its financial performance and prepares financial statements.

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