Question

1. Explain the following:

   a. Explain nonresellable goods.

   b. ​Explain product uniformity.

c. Explain preauthorized debits and credits.

d. Explain liabilities for payment of instrument

Answer 1

1.

A. Non resellable goods :-

These types of goods cannot be resold to another customers and seller has to replace the product or good to the customer.

Generally damaged goods are comes under this type of goods

B. Product uniformity :-

Uniformity involves in consistency in lack of variations between the items being compared

In that case if any products are highly lacking in comparaision then we can say that product uniformity exists between those two or more products.

C. Pre-authorized debits and credits

There are some regular expenses which are to be incurred in for regular time intervals to pay those expenses we need higher authorities authorisation. It is very difficult to get Authorization for each period and in some cases higher authorities may not available then delay in payments leads to decrease the credibility of the organisation. In those type of situation the authorities make pre authorisation for some specific expenses.so this expenses are termed as pre authorised debits

Example :- rent expense for building etc..

In the same type there are some fixed income to be authorised by authorities then higher management people will pre authorise the staff members to get those type of income. These are termed as pre authorised credits.

D. Liabilities for payments of instruments :-

There are many source of credit in bussiness environment in that one of them as note payable or bills payable. These are the financial instrument which are authorised by the debtor and that debtor will assure the creditor that some amount will be paid at certain time period. Till the expiry of that time the debtor has to recognise the bill amount as liabilities for payments of instrument.

Not only bills payable there are many instruments like overdraft, credit card bill etc..