The Principle of Caveat Emptor Applies Only to Situations Where

question 60

Multiple Choice

The principle of caveat emptor applies only to situations where

• A)the seller has made no misrepresentation about the goods.
• B)the goods can be inspected by the buyer.
• C)the goods are specific items.
• D)the goods are in existence.
• E)all of the above

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Definitions:

Short-term Finance

Financing obtained for a time period of less than one year, often used to address immediate operational needs.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable and inventories.

Shortage Costs

Shortage costs are the expenses incurred by a business when it does not have enough inventory or resources to meet demand, including lost sales and dissatisfied customers.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.