Assume That Sherrie's Cherries Contracts with Dessert World to Sell

question 11

Multiple Choice

Assume that Sherrie's Cherries contracts with Dessert World to sell and ship 600 pounds of cherries in three equal installments of 200 pounds each.If the first installment arrives with 5 pounds of spoilage,then Dessert World may

• A)reject the installment shipment because of the perfect tender rule.
• B)not reject the installment if those in the food industry expect a small percentage of spoilage with fresh fruits or vegetables.
• C)reject the entire contract.
• D)declare a breach and "cover."

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Definitions:

Purchase Invoice

A purchase invoice is a document issued by a seller to a buyer that outlines the sale transaction, including the types of products or services sold, quantities, prices, and payment terms.

Refund Liability

A liability recorded on the balance sheet for expected refunds to customers for returned or unsatisfactory products or services.

Estimated Returns

The anticipated amount of profits or losses from an investment, often based on historical data and future projections.

Management Estimates

Judgments and assumptions made by a company's management for reporting financial figures, when a precise value cannot be determined.