An Option Agreement Is

question 90

Multiple Choice

An option agreement is

• A) a contract transferring the fee simple to a new owner.
• B) a contract by which the offeror of property promises to hold his offer open for a period of time during which the offeree can accept the offer and the property can't be sold to another.
• C) a contract by which an offeree promises to buy the property offered at a later date set in the contract.
• D) a contract that provides that a seller will retain the title in the property until the buyer has made all of the required payments.
• E) a contract that provides that a debtor will transfer title in the property to a creditor as security for repayment of the debt.

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Definitions:

Conversion Costs

The costs specifically associated with converting raw materials into finished goods, typically including direct labor and manufacturing overhead.

FIFO Method

First In, First Out; an inventory valuation method where the first items purchased or produced are the first to be sold.

Goods Completed

Finished goods that have gone through the manufacturing process and are ready to be sold or distributed.

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold, standing for "First In, First Out."