Under a Shipment Contract, the Risk of Loss Passes to the Buyer

question 74

True/False

Under a shipment contract, the risk of loss passes to the buyer only when the seller tenders conforming goods to the buyer at the specified destination.

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Definitions:

Interest Revenue

Income earned on investments, loans, or accounts receivable that is generated from the interest charged.

Annual Return

The percentage of increase or decrease in the value of an investment over a one-year period, including dividends and appreciation.

Direct Financing Lease

A type of lease where the lessor records receivables equal to the net investment in the lease and recognizes income from interest over the lease term.