The main consideration to determine whether a sale has occurred is:
A)The economic substance of the transaction
B)Whether title to the goods has passed
C)The provisions of the legal contract
D)Whether the sale is for goods or services

Question

Quizplus · Accepted Answer

The economic substance of the transaction is the main consideration to determine whether a sale has occurred. This refers to the actual nature of the transaction, which may not always be reflected in the legal contract or the passing of title to goods. For example, if the seller retains the risks and rewards of ownership even after delivery of the goods, it may not be considered a sale. Therefore, it is important to look beyond legal formalities and focus on the substance of the transaction.

The Main Consideration to Determine Whether a Sale Has Occurred