When a Buyer Has Possession of Goods After Rightfully Rejecting

question 13

Multiple Choice

When a buyer has possession of goods after rightfully rejecting them, the buyer is treated:

• A) the same as a seller in the possession of goods after default by a buyer.
• B) as being strictly liable for the safety of the goods.
• C) the same as if an entrustment had been created.
• D) as an insurer of the goods until the seller retakes possession.

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Definitions:

Income Statement

A financial statement that reports a company's earnings, expenses, and net income over a specific period.

Ending Inventory

Merchandise value ready to be sold at the close of an accounting cycle.

Retained Earnings

The portion of net earnings not distributed as dividends, but retained by the company to be reinvested in its core business or to pay debt.

Accounting Principle

Guidelines and rules that govern the accounting practices and procedures.