Borealis Inc, a Company Based in Edmonton, Entered into a Contract

question 62

Multiple Choice

Borealis Inc, a company based in Edmonton, entered into a contract with Australis Ltd, a company based in Geelong, Australia. Australis was required to deliver two tonnes of white corridale roving wool at $50 Canadian per kilogram. The contract was stated to be "CIF (INCOTERMS 2000) Geelong." That means that

• A) Australis must arrange and pay for shipping.
• B) Borealis is responsible for arranging and paying for shipment of the goods to Geelong.
• C) the parties were required by law to use INCOTERMS.
• D) Borealis will acquire ownership and risk as soon as the goods are placed on board.
• E) the party that purchases insurance will also be named as the beneficiary of the policy.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Current Liabilities

Obligations or debts a company must pay within a year or within its operating cycle if longer than a year.

Company Finance

Refers to the financial activities related to running a company, focusing on maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies.

Horizontal Analysis

An analytical technique in financial statement analysis where an item or line is compared over multiple periods to identify trends or patterns.