The account, Accrued Loss on Purchase Commitments, used when the year-end market price is less than the fixed purchase price for non-cancellable purchase obligations is reported as a(n)

Question

Quizplus · Accepted Answer

The account, Accrued Loss on Purchase Commitments, represents an obligation to purchase goods at a fixed price that is greater than the current market price. As such, it represents a liability that should be reflected on the balance sheet.

The Account, Accrued Loss on Purchase Commitments, Used When the Year-End