Why Is It Important to Determine When the Title to Goods

question 10

Multiple Choice

Why is it important to determine when the title to goods passes from the seller to the buyer?

• A) because payment is due when title passes
• B) because the party with title is responsible for delivery costs
• C) because risk usually passes with title
• D) because the seller can no longer be sued once title has passed to the buyer

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Definitions:

Stock Investment

The purchase of shares in a company with the expectation of earning a return on investment through dividends, share price appreciation, or both.

Dividend

A portion of a company's earnings distributed to shareholders as a reward for their investment.

Fair Value

An estimate of the market price for assets or liabilities, reflecting what a willing buyer would pay a willing seller in an arm's length transaction.

Parent and Subsidiary

A parent and subsidiary relationship exists when one company, the parent, owns more than half of another company, the subsidiary, granting control and often integrating operations or management.