Roger Wants to Buy a New Car,so He Borrows Money

question 17

Multiple Choice

Roger wants to buy a new car,so he borrows money from the bank.Several months later,he sells his car to Lisa,who agrees to pay the bank loan.Which of the following is true?

• A) The bank is an intended third-party beneficiary.
• B) The bank is an incidental third-party beneficiary.
• C) Roger is an intended third-party beneficiary.
• D) Lisa is an intended third-party beneficiary.
• E) Lisa is an incidental third-party beneficiary.

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Definitions:

Gain or Loss

Gain or loss refers to the financial result from the sale of a capital asset, where a gain occurs if the sale price exceeds the purchase cost, and a loss occurs if the sale price is below the purchase cost.

Sales Price

The amount of money that a buyer pays to purchase a product or service.

Net Proceeds

Net Proceeds refer to the amount of money received from a sale or transaction after all fees, expenses, and costs have been deducted.

Operating Cycle

The period from the acquisition of inventory to the collection of cash from receivables, reflecting a company's efficiency in managing its working capital.