Which of the Following Is True Regarding Any Right to "Cover

question 38

Multiple Choice

Which of the following is true regarding any right to "cover" in regard to a buyer's rights under the UCC?

• A) The UCC does not recognize any concept called a right to cover.
• B) The UCC recognizes that sellers have a right to cover and find substitute buyers in the event of a breach of contract.
• C) The UCC recognizes the right of cover in regard to the right of sellers to cover transactions involving installment sales with financing statements.
• D) The UCC recognizes the right of buyers to cover, or substitute, goods for those due under a sales agreement.
• E) The UCC recognizes the right of sellers to resell goods to other buyers in order to cover contractual obligations.

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Definitions:

Parent Assets

Assets held by a parent company, including those arising from investments in subsidiaries and other entities over which the parent company has control.

Carrying Amount

The book value of assets and liabilities that is reported in the financial statements, calculated as the original cost minus any depreciation, amortization, or impairment costs made against the asset.

Fair Value

The financial figure anticipated when disposing of an asset or the price to move a liability in a regulated exchange involving market entities on the date of valuation.

Gain On Bargain Purchase

Occurs when a company acquires another company for a price less than the fair market value of its net assets, resulting in a gain on the acquisition balance sheet.