A Met B While Shopping, and in the Course of Conversation

question 47

True/False

A met B while shopping, and in the course of conversation, mentioned that he had a motorcycle for sale. B was familiar with A's motorcycle and offered to purchase it for $500. A accepted the offer, and A and B walked to A's home to get the motorcycle. When they reached A's house, they were told by A's father that the motorcycle had been stolen earlier in the day and was subsequently found by the police in a badly damaged and burned condition in a local stone quarry. B is bound in contract and must purchase the motorcycle even though it is badly damaged.

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Definitions:

Cost Center

A business unit or department within an organization that does not directly generate revenue but incurs costs, and its performance is evaluated based on cost control.

Investment Center

An investment center is a business unit or division within an organization that is responsible for its own revenues, expenses, and assets, and its performance is often evaluated based on return on investment (ROI) or other profitability ratios.

Profit Center

A business unit or department within an organization that is responsible for generating its own revenue and profit.

Direct Expenses

Costs that can be directly traced to a product, service, or activity without any need for allocation.