If You Purchase a Business,it Is Lawful for the Previous

question 13

Multiple Choice

If you purchase a business,it is lawful for the previous owner to set up a competing business that draws its former and your current customers away from you _____.

• A)only by paying a stipulated fee
• B)any time he or she wants
• C)only after a stipulated time
• D)only in a mutually agreed-upon location

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Definitions:

Consignment

A business arrangement where goods are left in the possession of another party to sell, but ownership remains with the supplier until sold.

F.O.B. Destination

Seller pays or is responsible for the cost of freight to purchaser’s location or destination.

FIFO Method

First-In, First-Out method, an inventory valuation method where the first items purchased are the first ones sold, used in calculating cost of goods sold.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.