Builders Exchange, Inc

question 6

Multiple Choice

Builders Exchange, Inc., issues an instrument in favor of Custom Construction Company. For the instrument to be negotiable, it must

• A) ​be a conditional promise or order to pay.
• B) ​be payable on demand or at a specific time.
• C) ​be signed by the payee.
• D) ​recite the consideration given in exchange for it.

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Definitions:

Gross Profit Rate

The ratio of gross profit (sales minus cost of goods sold) to sales revenue, expressed as a percentage.

Balance Sheet

A financial statement that summarizes a company’s assets, liabilities, and shareholders’ equity at a specific point in time.

Gross Profit Method

An estimating technique used to determine the cost of goods sold and ending inventory, based on the gross profit margin.

Goods Available

Refers to the total quantity or cost of goods that a company has ready for sale at any given time, including both its beginning inventory and the cost of goods purchased or manufactured during the period.