If a material amount of inventory has been ordered through a formal purchase contract at the end of reporting period for future delivery at firm prices

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If a material amount of inventory has been ordered through a formal purchase contract at the end of reporting period for future delivery at firm prices

A. This fact must be disclosed
B. Disclosure is required only if prices have declined since the date of the order
C. Disclosure is required only if prices have since risen substantially
D. An appropriation of the retained earnings is necessary

Answer: A. This fact must be disclosed

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