If the Goods That Are the Subject of a Sale

question 51

Multiple Choice

If the goods that are the subject of a sale are in the possession of a bailee and are to be delivered without being moved, when does the risk of loss pass to the buyer?

• A) At such time as the contract of sale was entered.
• B) At such time as the buyer receives the negotiable document of title.
• C) When the seller tenders a nonnegotiable document of title to the bailee.
• D) When the bailee is orally notified of the sale.

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Definitions:

FICA Taxes

Taxes designed to provide workers with supplemental retirement, employment disability, and medical benefits.

Employee Earnings

The total amount of money paid to an employee by an employer, including wages, salaries, bonuses, and commissions.

Compensation

Payment or benefits provided to employees in exchange for their work or services.

Accrue a Liability

The process of recognizing liabilities that have been incurred but not yet paid or recorded in the financial statements.