If Destruction or Casualty to Goods,total or Partial,occurs After Risk

question 9

Multiple Choice

If destruction or casualty to goods,total or partial,occurs after risk of loss has passed to the buyer,who is responsible for losses?

• A) The seller
• B) The buyer,who must pay the entire contract price of the goods
• C) The buyer if the loss is partial;both parties share the loss if it is total
• D) The carrier delivering the goods

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Definitions:

Accrual Basis

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.

GAAP Constraint

Guidelines that restrict or limit certain accounting practices under Generally Accepted Accounting Principles, to ensure fairness, consistency, and accuracy in financial reporting.

Disbursement Basis

Accounting method where expenses are recorded when cash is paid out, rather than when incurred.

CICA Handbook

The comprehensive guide published by the Canadian Institute of Chartered Accountants detailing accounting practices and standards in Canada.