Purchase and Sale of Goods
Commerce · 50 practice questions
Procedure and documentation (enquiry, quotation, order, invoice, proforma invoice, statement of accounts, indent, consular invoice, bill of lading, certificate of origin, consignment note); terms of trade (trade discount, quantity discount, cash discount, warranties, C.O.D., C.I.F., F.O.B., E.O.E.); terms of payment — cash (legal tender) and credit (types, functions, merits and demerits).
- Examine the procedures and documents used in the purchase and sale of goods.
- Determine the terms of trade.
- Distinguish between cash and credit forms of payment.
- Analyse the merits and demerits of credit transactions.
Try a few questions
- Practice question 1
The 'passing of property' (ownership) in a sale of goods generally determines
- A.Only the physical location where goods are stored
- B.The name of the trade association involved
- C.The colour or packaging of the goods
- D.Which party bears the risk of loss or damage to the goods and who has legal title to them at a given point
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D. Which party bears the risk of loss or damage to the goods and who has legal title to them at a given point
Passing of property determines which party bears risk of loss/damage and holds legal title at a given point.
- Practice question 2
A 'bill of exchange' is a written, unconditional order by one party (the drawer) instructing another party to
- A.Register a new business with the CAC
- B.Pay a specified sum of money to a named person, either on demand or at a determinable future date
- C.Deliver goods without any payment obligation
- D.Cancel an existing insurance policy
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B. Pay a specified sum of money to a named person, either on demand or at a determinable future date
A bill of exchange is a written order instructing payment of a specified sum, on demand or at a future date.
- Practice question 3
An 'enquiry' in the purchase and sale of goods process is typically the first step, in which a prospective buyer
- A.Pays for goods already received
- B.Places a firm order for goods
- C.Issues an invoice to the seller
- D.Asks a seller for information such as price, availability and terms for a particular good
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D. Asks a seller for information such as price, availability and terms for a particular good
An enquiry is the buyer's request to the seller for information such as price and availability before ordering.
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