Choose the best answer. 1.Under a consignment arrangement, the consignor recognizes net revenue equal to the gross sales price less the consignee's commission. * a.True b.False 2.A consignor recognizes revenue when the consigned goods are transferred to the consignee. * a.True b.False 3.If another party is primarily responsible for fulfilling a contract with a customer, this may indicate that the entity is an agent. * a.False b.True 4.Pinewood Co. agrees to create an artifcat for Saga Co. Pinewood is primarily liable for the artifact's conformance with the customer's specifications. Pinewood does not have the required expertise so its subcontracts Saleng Co. to do the manufacturing. If the entire manufacturing process is outsourced from Saleng Co., Pinewood would be acting as an agent of Saleng. * a.True b.False 5.Fight Club Co. enters into a contract with Tough Co., a promoter of mixed martial arts (MMA) fights. Under the contract, Fight Club Co. purchases MMA event tickets from Tough at a negotiated price and resells them to end customers at a marked-up price. Fight Club bears the loss for unsold tickets. The arrangement between Fight and Tough implies a principal-agent relationship whereby Fight is an agent of Tough. * a.True b. False
Choose the best answer.
1.Under a consignment arrangement, the consignor recognizes net revenue equal to the gross sales price less the consignee's commission. *
a.True
b.False
2.A consignor recognizes revenue when the consigned goods are transferred to the consignee. *
a.True
b.False
3.If another party is primarily responsible for fulfilling a contract with a customer, this may indicate that the entity is an agent. *
a.False
b.True
4.Pinewood Co. agrees to create an artifcat for Saga Co. Pinewood is primarily liable for the artifact's conformance with the customer's specifications. Pinewood does not have the required expertise so its subcontracts Saleng Co. to do the manufacturing. If the entire manufacturing process is outsourced from Saleng Co., Pinewood would be acting as an agent of Saleng. *
a.True
b.False
5.Fight Club Co. enters into a contract with Tough Co., a promoter of mixed martial arts (MMA) fights. Under the contract, Fight Club Co. purchases MMA event tickets from Tough at a negotiated price and resells them to end customers at a marked-up price. Fight Club bears the loss for unsold tickets. The arrangement between Fight and Tough implies a principal-agent relationship whereby Fight is an agent of Tough. *
a.True
b. False
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