Reference no: EM132969862

Problem 1: Which of the following cost flow assumptions is used for inventory when an entity build townhouses?

a) FIFO

b) Specific identification

c) Weighted average

d) Any of these cost flow assumptions

Problem 2: An entity is a large manufacturer of machines. A major customer has placed an order for a special machine for which it has given a deposit to the entity. The parties have agreed on a price for the machine. As per the terms of the sale agreement, it is free on-board contract and the titles passes to the buyer when the goods are loaded into the ship at the port. When should the revenue be recognized by the entity?

a) When the customer orders the machine.

b) When the deposit is received.

c) When the machine is loaded at the port.

d) When the machine has been received by the customer.