Which of the Following Is True of a Shipment Contract

question 13

Multiple Choice

Which of the following is true of a shipment contract?

• A)The carrier is liable for the goods while they are in transit from the seller to the buyer.
• B)The title and risk of loss pass to the buyer when the goods are delivered to the carrier.
• C)The seller has an insurable interest in the goods until they are delivered to the buyer.
• D)The title and risk of loss pass to the buyer when the payment is made by the buyer.

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Definitions:

Fixed Costs

Costs that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Reported Income

The income that a company officially reports on its income statement, which has been calculated according to the applicable accounting standards.

FIFO Method

The First-In, First-Out accounting method, where the first items added to inventory are the first ones to be sold or used.

Inventory Valuation

The method used to price inventory items on the balance sheet, impacting cost of goods sold and financial results.