In a Sale on Approval

question 58

Multiple Choice

In a sale on approval:

• A) possession, but not title, is transferred to the buyer for a stated period of time.
• B) possession and title are transferred to the buyer for a stated period of time.
• C) title, but not possession, is transferred to the buyer for a stated period of time.
• D) neither title nor possession is transferred to the buyer for a stated period of time.

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Definitions:

Profit

The financial gain achieved when revenues generated from business activities exceed the expenses, costs, and taxes associated with sustaining the business.

Work in Process

Goods that are in the production process but are not yet completed, reflecting a stage between raw materials and finished goods.

Materials

The raw inputs or components used in the manufacturing process to produce goods or products.

Cost of Goods Sold

The expenses directly related to creating a company's sold goods, covering both material costs and wages.