Purchase commitments A. Are obligations of the company to acquire certain goods at a fixed price and fixed quantity sometime in the future B. require disclosures when considered common and significant C. Giving rise to a purchase price falling below the agreed price is accounted for as debit to loss on purchase commitments and credited to an estimated liability D. All of the above E. None of the above
Purchase commitments
A. Are obligations of the company to acquire certain goods at a fixed price and fixed quantity sometime in the future
B. require disclosures when considered common and significant
C. Giving rise to a purchase price falling below the agreed price is accounted for as debit to loss on purchase commitments and credited to an estimated liability
D. All of the above
E. None of the above
Ownership of inventories is normally transferred to the buyer
A. when legal title to inventories is transferred
B. when the purchase price if fully paid
C. upon shipment of the goods
D. upon filling up the sales order
When accounting for inventories
A. the form of sales contract is more important than its substance
B. the agreement between seller and buyer shall be considered in determining the timing of transfer of ownership over the goods
C. sales contract is ignored since ownership over inventories are transferred only upon receipt of delivery by the buyer
D. a
In a sales transaction FOB destination, freight prepaid, sales and A/R is recognized by the seller upon
A. production of the goods
B. shipment of the goods
C. receipt of goods by buyer
D. sending the invoice to buyer
Which is not considered in approximating the value of inventory using inventory estimation methods?
A. sales returns
B. sales allowance
C. purchase returns
D. purchase discount
Retail inventory method would include this item in calculating goods available for sale at both cost and retail.
A. freight in
B. purchase returns
C. mark-ups
D. markdowns
Increase in sales price that does not increase the sales price above the original sales price
A. initial mark-up
B. additional markup
C. mark up cancellation
D. mark down cancellation
Share dividend of the same class ______ the shareholders’ investment balance and _______ cost per share of investment. *
A. Increases; increases
B. affects not; decrease
C. decreases; decreases
D. affects not; increases
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