A Sale That Requires the Customer to Pay the Purchase

question 32

Multiple Choice

A sale that requires the customer to pay the purchase price in instalments

• A)should always be recognized under the contract-based view as the contract has already established the customer's obligation to pay.
• B)should only be recognized upon receipt of the last instalment payment.
• C)may be recognized under the earnings approach if measurement and collectability issues do not exist.
• D)None of these.

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Definitions:

Goods-In-Bailment

A legal term referring to the temporary transfer of possession of personal property by one party to another, with the intent that the property will be returned.

Risk Of Loss

Risk of loss refers to the responsibility for damage or destruction of goods, determining which party bears the financial burden should goods be damaged during a transaction.

Delivery Driver

A delivery driver is a person who transports goods from a seller or distributor to the customer's location.

Agent Of

A representative or individual authorized to act on behalf of another person or entity in legal or business matters.