Under the Uniform Commercial Code, If the Goods Under Contract

question 35

Multiple Choice

Under the Uniform Commercial Code, if the goods under contract are partially destroyed:

• A) the contract is automatically rescinded and the parties are restored to their to their status quo ante without the possibility of seeking enforcement under the contract's original terms.
• B) the contract is enforceable and may not be cancelled by either party.
• C) the seller may demand the right to inspect the damaged goods in order to decide whether to deliver replacement conforming goods or alternatively require the buyer to accept them in their damaged state and provide allowance for the damages.
• D) the buyer may demand the right to inspect the damaged goods in order to decide whether to reject them or to accept them in their damaged state and claim an allowance for the damages.

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Definitions:

Costing Inventories

The process of determining the value of inventory, including raw materials, work-in-progress, and finished goods, for financial reporting.

Homogeneous Items

Items that are of the same kind or nature, possessing common features or characteristics.

Inventory Cost Formula

The method used to determine the cost of goods sold, such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or Average Cost method.

Physical Flow

This term refers to the actual movement of goods in and out of a warehouse or production facility.