Field Farms and Gourmet Restaurant Enter into a Contract for a Sale

question 66

Multiple Choice

Field Farms and Gourmet Restaurant enter into a contract for a sale of lettuce. After Field Farms ships the lettuce but before the restaurant receives it, Gourmet goes out of business and sends notice to Field that it won't be paying for the lettuce. Field

• A) can stop the shipment.
• B) cannot stop the shipment but can sue Gourmet for damages.
• C) can stop the shipment only if Gourmet pays for half of the shipping price.
• D) cannot stop the shipment or sue Gourmet for damages until the lettuce is proven to be in good condition on arrival.

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Definitions:

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.

Net Income

The net income of a business once all costs, taxes, and expenses are deducted from its total revenue.

Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.

Treasury Stock

Shares that were once part of the outstanding shares of a company but were later reacquired and are held in the company’s treasury.