Which of the following terms depicts processing orders for goods that are stored by the seller, often, because the buyer is not ready or able to receive the goods at the time of the order?
a. Sham sales
b. Side agreements
c. Consignment sales
d. Bill-and-hold sales
d
FEEDBACK: a. Incorrect. Sham sales is a term used for various types of fictitious sales.
b. Incorrect. Side agreements are sales terms and arrangements (e.g., a liberal return policy) that are made outside normal reporting channels.
c. Incorrect. Consignment sales are transactions where one company holds and sells goods that are owned by another company. Recording the full amount of a consignment sale leads to inflated revenues and corresponding costs.
d. Correct.
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