Which of the Following Holds True of the Seller's Entitlement

question 20

Multiple Choice

Which of the following holds true of the seller's entitlement on the recovery of purchase price of goods?

• A) The seller is not entitled to the purchase price of all goods accepted by the buyer.
• B) The seller cannot recover the purchase price of goods damaged after the buyer assumed the risk for their loss.
• C) Even if the seller successfully resells the goods, he can claim recovery of the purchase price from the buyer.
• D) If the seller resells goods to another buyer, the seller must give the first buyer due credit for the proceeds of the resale.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Direct Costing

A costing method where only variable manufacturing costs are assigned to inventory and cost of goods sold, with fixed manufacturing overhead treated as a period cost.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold, with fixed overhead costs treated as period expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including both materials and labor costs.