Some Firms That Dispose of Only a Small Part of Their

question 66

Multiple Choice

Some firms that dispose of only a small part of their total output by consignment shipments fail to make any distinction between consignment shipments and regular sales.Which of the following would suggest that goods have been shipped on consignment?

• A) Numerous shipments of small quantities.
• B) Numerous shipments of large quantities and few returns.
• C) Large debits to accounts receivable followed by small periodic credits.
• D) Large debits to accounts receivable followed by large periodic credits.

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Definitions:

Guaranteed

A commitment or assurance, often by a third party, that certain conditions will be fulfilled, including payments or the performance of contractual obligations.

Interest Rate

The rate at which a portion of money is applied as a fee for its loan, commonly expressed per annum.

Present Value

The calculated present value of future monetary sums or cash flow series, with a defined rate of return.

Invest

The process of investing funds or assets in a project with the aim of earning extra income or gains.