On December 27,2014,Admission Company Ordered Merchandise for Resale from Eviction,Inc

question 62

Multiple Choice

On December 27,2014,Admission Company ordered merchandise for resale from Eviction,Inc. ,that cost $7,000 (terms cash within 10 days) .Eviction shipped the merchandise f.o.b.shipping point on December 28,2014,and the goods arrived on January 2,2015.The invoice was received on December 30,2014.Admission Company did not record the purchase in 2014 and did not include the goods in ending inventory.The effects on Admission Company's 2014 financial statements were

• A) income and owners' equity were correct;liabilities were incorrect,assets were correct.
• B) income and owners' equity were correct;assets and liabilities were incorrect.
• C) income,assets,liabilities,and owners' equity were correct.
• D) income,assets,liabilities,and owners' equity were incorrect.

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Definitions:

Present Intent To Contract

The current intention of parties to form a contract, which is necessary for establishing a binding agreement.

Code's Standards

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Contractual Liabilities

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Definiteness Standards

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