Which of the Following Is Not an Example of a Situation

question 8

Multiple Choice

Which of the following is not an example of a situation in which an entity retains the risks and rewards of ownership?

• A) When the entity retains an obligation for unsatisfactory performance not covered by normal warranty provisions.
• B) When the entity provides a normal warranty for the goods sold.
• C) When the buyer has the right to rescind the purchase for a reason specified in the sales contract and the entity is uncertain about the probability of return.
• D) When the goods that are shipped subject to installation and the installation is a significant part of the contract which has not yet been completed by the entity.
• E) When the receipt of revenue form a particular sale is contingent upon the derivation of revenue by the buyer from its sales of goods.

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Definitions:

Production

The process of creating goods or services by combining labor, land, and capital to generate value.

Total Revenues

The overall amount of money generated by a business, organization, or individual from its activities, before any expenses are subtracted.

Midpoint Formula

The midpoint formula is a method used to find the middle point between two coordinate points on a line segment by averaging the x-coordinates and the y-coordinates.

Supply

The total amount of a product or service that is available for purchase at various prices in a given market.