A company ordered inventory and made a $2,000 down payment.The inventory is to be received in two months.This is an example of an):
A)mutually unexecuted contract.
B)partially executed contract.
C)contingent liability.
D)a prepaid amount.

Question

Quizplus · Accepted Answer

This is an example of a partially executed contract because one party (the company) has fulfilled part of its obligation by making a down payment, but the transaction is not fully completed until the inventory is received.

A Company Ordered Inventory and Made a $2,000 Down Payment