When forecasting cash disbursements in the cash budget:
A) they count as a cash receipt until they are paid.
B) they should be recorded in the month they will be paid.
C) the disbursement should be recorded in the month the obligation was incurred.
D) the money can be used for other purposes until it is due for disbursement.
Answer: B
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Dora Dolby was employed as an agent for Ace Used Car Company to purchase newer-model used cars. Her authority was limited by a $3,000 maximum price for any car. A wholesaler showed her a 1938 classic car that was selling for $5,000. The wholesaler knew that Ace only dealt in newer-model cars and that Dolby had never paid more than $3,000 for any car. Dolby bought the car for Ace, convinced that it was worth at least $7,000. When she reported this to Ted Williams, Ace's owner, Williams was furious but nevertheless authorized processing of the automobile for resale. Williams also began pricing the car with antique car dealers who indicated that the current value of the car was $4,800. Williams called the wholesaler to state that Dolby had exceeded her authority, that he was returning the
car, and that he was demanding repayment of the purchase price. What is the wholesaler's best defense in the event of a lawsuit? A. Dolby had apparent authority to purchase the car. B. Dolby's purchase was effectively ratified by Ace. C. Dolby had express authority to purchase the car. D. Dolby had implied authority to purchase the car.
Pricing below cost can be profitable in the long term
Indicate whether the statement is true or false