Strategic Business Analysis Quiz

STRATEGIC BUSINESS ANALYSIS PRE POST TEST 1 : MANAGERIAL PLANNING AND GOAL SETTING A Strategic Business Unit (SBU) must always have a unique product line that doesn't overlap with other units. ANSWER : TRUE The success of an SBU is completely independent of corporate strategy. ANSWER : TRUE An identifiable customer group is a key defining characteristic of an SBU. ANSWER : TRUE Sister businesses' strategies can influence an individual SBU's strategy. ANSWER : TRUE SBUs must operate in isolation from other business units to be effective. ANSWER : TRUE The overall direction that guides decisions across all units ANSWER : Corporate Strategy Other divisions within the same corporation that can influence unit decisions ANSWER : Sister Businesses A distinct unit producing products for an identifiable market segment ANSWER : Strategic Business Unit Specific plans and approaches for competing in a particular market ANSWER : Business Strategy The target market segment that defines an SBU's focus ANSWER : Customer Group What is the primary purpose of goal setting? ANSWER : To provide direction and motivation Which of the following is NOT a characteristic of a SMART goal? ANSWER : Ambiguous What is the first step in the planning process? ANSWER : Identifying goals and objectives What is the importance of breaking down large goals into smaller, more manageable steps? ANSWER : It makes the process less overwhelming. Which of the following is NOT a benefit of effective planning? ANSWER : Reduced stress and anxiety A formal, written declaration of an organization's purpose and reason for existence. ANSWER : Mission Statement A detailed plan for achieving short-term objectives, usually within one year. ANSWER : Tactical Planning Measurable, Achievable, Relevant, Timely. ANSWER : SMART Goals A long-term plan that outlines an organization's overall direction and competitive advantage. ANSWER : Strategic Planning A plan that addresses potential risks and disruptions to the organization's operations. ANSWER : Contingency Planning A statement that describes the desired future state of the organization ANSWER : Vision Statement A quantitative expression of a plan for a defined period, usually one year. ANSWER : Budgets An analysis of an organization's internal Strengths and Weaknesses and external Opportunities and Threats. ANSWER : SWOT Analysis Measurable metrics used to track progress towards achieving goals. ANSWER : Key Performance Indicators (KPIs) A plan for day-to-day activities and operations within a specific department or function. ANSWER : Operational Planning PRE POST TEST 2 : OPTIONS OPEN TO ORGANIZATION Strategy formulation primarily involves the day-to-day activities and decisions made to execute a chosen strategy. ANSWER : TRUE SWOT analysis is a tool used primarily during strategy implementation to assess the internal strengths and weaknesses of an organization. ANSWER : TRUE A mission statement defines the specific, measurable, achievable, relevant, and time-bound goals of an organization. ANSWER : TRUE Effective strategy implementation requires clear communication, strong leadership, and a well-defined organizational structure. ANSWER : TRUE A cost leadership strategy focuses on offering products or services at the lowest possible cost in the industry. ANSWER : TRUE The process of putting a strategic plan into action, which includes allocating resources, organizing tasks, and motivating employees. ANSWER : Strategic Implementation A framework for analyzing an organization's internal strengths and weaknesses and external opportunities and threats. ANSWER : SWOT Analysis A statement that defines an organization's purpose and its reason for being. ANSWER : Mission Statement A model that identifies five competitive forces that shape every industry and help determine industry attractiveness and profitability. ANSWER : Porter's Five Forces Which of the following is a key step in strategy formulation? ANSWER : Conducting a SWOT analysis. Strategy implementation primarily focuses on: ANSWER : Putting the chosen strategy into action. A mission statement is typically part of which phase? A NSWER : Strategy formulation. Which of the following is NOT a common tool used in strategy formulation? ANSWER : Performance appraisal system. Restructuring the organization is a key activity during: ANSWER : Strategy implementation. PRE POST TEST 3 : FORWARD FOR ORGANIZATION This decision-making model emphasizes the importance of intuition and subjective judgment in making decisions. ANSWER : Intuitive Decision Making This type of decision making involves choosing between two or more alternatives with known probabilities of outcomes. ANSWER : Risk Decision Making This decision-making technique involves breaking down a complex problem into smaller, more manageable parts. ANSWER : Decomposition This stage of the decision-making process involves identifying and defining the problem or opportunity. ANSWER : Problem Identification Which of the following is NOT a key step in the rational decision-making process? ANSWER : Seek immediate approval from upper management What is the primary goal of using decision-making tools like SWOT analysis or cost-benefit analysis? ANSWER : To reduce uncertainty and make more informed choices Which of the following best describes a non-programmed decision? ANSWER : A unique and complex decision that requires significant thought and analysis What is the importance of effective communication in the decision-making process? ANSWER : It helps to gather information and ensure everyone is on the same page A marketing manager decides to launch a new product without conducting any market research, assuming the product's success based on gut feeling. This is an example of effective decision-making. ANSWER : FALSE A production manager identifies a potential bottleneck in the manufacturing process and implements a solution that improves efficiency by 15%. This demonstrates proactive decision-making. ANSWER : TRUE A project manager regularly updates the project timeline and communicates any potential delays to the team and stakeholders. This demonstrates transparent and effective communication, which is crucial for successful decision-making. ANSWER : True A human resources manager chooses to hire a candidate with the lowest salary demands, regardless of their qualifications and experience. This is a cost-effective and sound decision. ANSWER : True A company decides to invest heavily in a new technology without considering the potential impact on the environment or the local community. This demonstrates a responsible approach to decision-making. ANSWER : FALSE PRE POST TEST 4 : SHORT TERM DECISIONS AND ACCOUNTING INFORMATION Sunk costs are relevant for short-term decision-making. ANSWER : FALSE Opportunity costs are relevant for short-term decision-making. ANSWER : TRUE Financial accounting information is always the most relevant for making short-term operational decisions. ANSWER : FALSE Short-term decisions typically focus on maximizing long-term profitability. ANSWER : FALSE Relevant costs and revenues are those that differ between the alternative courses of action. ANSWER : TRUE Information that is free from error and omission. ANSWER : FAITHFUL REPRESENTATION Information that is capable of making a difference in the decisions of users. ANSWER : RELEVANCE Information that can be easily compared with that of other entities in the same industry. ANSWER : COMPARABILITY Information that is available to decision-makers in time to be relevant. ANSWER : TIMELINESS Information that can be independently verified by different observers. ANSWER : VERIFIABILITY A company produces 10,000 units of Product A per year. The company has received a special order for 2,000 units at a price of ?50 per unit. The company's normal selling price is ?60 per unit. Variable costs per unit are ?35, and fixed costs are ?150,000 per year. Should the company accept the special order? ANSWER : Yes, because the special order price exceeds the variable cost per unit. A company currently manufactures a component used in its products. The variable cost per unit of the component is ?20, and the fixed cost is ?50,000 per year. An outside supplier has offered to sell the component to the company for ?25 per unit. Should the company make or buy the component? ANSWER : Buy, because the fixed cost can be eliminated if the component is bought. A company produces a joint product that can be sold at the split-off point for ?10 per unit. The joint product can be processed further into a more refined product at an additional cost of ?3 per unit. The refined product can then be sold for ?15 per unit. Should the company sell the product at the split-off point or process it further? ANSWER : Process further, because the selling price of the refined product is higher. A company has a product line that generates a loss of ?20,000 per year. Fixed costs allocated to the product line are ?50,000. If the product line is dropped, 20% of the fixed costs can be avoided. Should the company drop the product line? ANSWER : No, because the company will still incur 80% of the fixed costs. COST ACCOUNTING PRE POST TEST 1 : INTRO TO COST ACCOUNTING To solve for the cost of goods sold for a manufacturing company, we have to add beginning inventory and purchases and then deduct the ending inventory ANSWER : TRUE Management accounting primarily caters to the needs of internal users of financial information. ANSWER : TRUE Financial accounting primarily caters to the needs of users of external financial information. ANSWER : TRUE The sum of all manufacturing costs except direct materials is called manufacturing Overhead. ANSWER : TRUE Conversion cost is the sum of direct labor and manufacturing overhead. ANSWER : TRUE Prime cost is the sum of direct labor and manufacturing overhead. ANSWER : FALSE Thread used in the production of mattresses, an indirect material, and forms part of the prime costs ANSWER : FALSE Period costs are also known as inventoriable costs. ANSWER : FALSE A variable cost is constant if expressed on a per unit basis but the total peso amount changes as the number of units increases or decreases. ANSWER : TRUE As activity increases within the relevant range, fixed costs remain constant on a per unit basis. ANSWER : FALSE The succeeding items are based on the following problem: Uncle John is a manufacturer of seasonal items. He started manufacturing Christmas gift bags in preparation for the upcoming holidays in September. He was able to produce 4000 gift bags during the month and incurred the following costs: Cardboard P 14,000 Scotch tape P 1,400 Yarn P 3,500 Wages of the prod employees P 10,500 Wages of the supervisor P 7,000 Electricity, 20% is for prod P 4,200 Rental, 20% is for prod P 5,000 How much is the prime cost? ANSWER : 29400 How much is the manufacturing overhead? ANSWER : 16200 How much is the conversion cost? ANSWER : 26700 How much is the cost per unit? ANSWER : 9.56 Assuming Uncle John was able to produce 5,000 units instead, how much is the total production cost? ANSWER : 45600 Assuming Uncle John was able to produce 5,000 units instead, how much is the cost per unit? ANSWER : 7.65 PRE POST TEST 2 : COST CONCEPTS AND CLASSIFICATION The following are product costs, except: ANSWER : Factory supervisor's salary. Within the relevant range, as the number of units produced increases: ANSWER : All of the above Manufacturing overhead includes: ANSWER : all manufacturing costs except direct labor and direct materials. The one cost that would be classified as part of both prime cost and conversion cost would be: ANSWER : direct labor. Materials used in the operation of a factory, such as cleaning supplies, that are not an integral part of the final product should be classified as: ANSWER : manufacturing overhead. Direct costs: ANSWER : are the variable costs of producing a product. Prime costs consist of: ANSWER : direct labor and direct materials. All of the following are examples of product costs except: ANSWER : salary of the plant manager. Conversion costs consist of ANSWER : direct labor and manufacturing overhead. Billie Electronics, Inc. manufactures car radios. The direct material cost assigned to car radios that Desco started during the period but did not fully complete would be found in the ending balance of: ANSWER : work in process inventory. The succeeding items are based on the following problem. Green Bones, Inc. is a manufacturer of quality grade plastic wares and has the following on record at the beginning of the period: Raw materials P 40,000 Work in Process 52,000 Finished Goods 18,000 Green Bones purchased P82,000 worth of raw materials during the month and applied P114,000 to production. He incurred P 51,000 for production staff salaries and paid P25,000 to the production supervisor. Utilities and rental paid directly attributable to the production cost P14,000. At the end of the period, Green Bones was able to finish P233,000 worth of goods and was able to sell P212,000. Based on the foregoing, how much is the total production cost? ANSWER : 212000 Based on the foregoing, how much is the cost of goods available for sale? ANSWER : 251000 Based on the foregoing, how much is the ending raw materials? ANSWER : 8000 Based on the foregoing, how much is the ending work in process? ANSWER : 23000 Based on the foregoing, how much is the ending finished goods? ANSWER : 39000 PRE POST TEST 3 : COST ACCOUNTING CYCLE For a manufacturing company, the cost of goods sold available for sale during a given accounting period is ANSWER : The sum of the above Which of the following would not be classified as manufacturing overhead? ANSWER : Direct materials The wage of a timekeeper in the factory would be classified as ANSWER : indirect labor Cost of goods sold is ANSWER : An expense As current technology changes manufacturing processes, it is likely that direct ANSWER : labor will decrease Sales commissions are classified as ANSWER : period costs For inventoriable costs to become expenses under the matching principle ANSWER : the product to which they attach must be sold A manufacturing company reports cost of goods manufactured as ANSWER : a component in the calculation of cost of goods sold Costs of goods manufactured in a manufacturing company is analogous to ANSWER : Cost of goods purchased in a merchandising company If the amount of “Cost of goods manufactured” during a period exceeds the amount of the “Total manufacturing costs” for the period, then ANSWER : Ending work in process is less than the amount of the beginning work in process inventory The succeeding items are based on the following problem: Taylor is a manufacturer of quality umbrellas and had the following on its records Inventories 8/1/24 8/31/24 Direct Materials P 48,000 P 32,000 Work-in-process 21,000 13,000 Finished goods 46,000 63,000 During the month, Taylor purchased P 92,000 direct materials and recorded 54,000 direct labor. Direct labor rate was at P6.50 per hour and factory overhead rate was P12/direct labor hour. How much is the prime cost? ANSWER : 146000 How much is the factory overhead? ANSWER : 99692.31 How much is the conversion cost? ANSWER : 193692.31 How much is the cost of goods manufactured? ANSWER : 269692.31 How much is the cost of goods sold? ANSWER : 252692.31 PRE POST TEST 4 : JOB ORDER COSTING The following statements are true except ANSWER : It is normally more time-consuming for a company to use standard costs in a job order costing system. A company producing which of the following would be most likely to use a time standard for labor? ANSWER : mattresses The primary accounting document in a job-order costing system is a(n) ANSWER : job-order cost sheet After the completion of production, standard and actual costs are compared to determine the _________ of the production process ANSWER : EFFICIENCY The source document that records the amount of raw material that has been requested by production is the ANSWER : job-order cost sheet The trend in job-order costing is to ANSWER : automate the data collection and data entry functions A good description of cost of goods manufactured is the recorded cost of the ANSWER : units completed during the period In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: ANSWER : Work in process inventory In a predetermined overhead rate in a job-order costing system that is based on machine hours, which of the following would be used in the numerator and denominator, respectively ANSWER : Estimated manufacturing overhead; estimated machine hours In a job-order costing system, the incurrence of indirect labor costs would usually be recorded as a debit to: ANSWER : Manufacturing overhead Anyone Company manufactures widgets. During the fiscal year just ended, the Company incurred prime costs of P 1,800,000 and a conversion cost of P 2,400,000. Overhead is applied at the rate of 180% of direct labor cost. How much of the above costs represent materials cost? ANSWER : 942857.14 Someone Corporation transferred P84000 of raw materials to its production department in February and incurred 44000 of conversion costs. The Company had a beginning WIP inventory costing P16,000 and closed the period with a P21,000 cost of WIP inventory. How much is the cost of goods manufactured? ANSWER : 123000 Last month, Everyone Company placed P 73,000 of materials into production. The printing department used 9,000 labor hours at P6.50 per hour and the Binding Department used 5,200 hours at P 7.20 per hour. Factory overhead is applied at a rate of P8.00 per labor hour in the Printing department and P 9.00 per labor hour in the Binding Department. Everyone's inventory accounts show the following beginning and ending balances, respectively: Finished Goods P 18,000 15,000 Work in Process 11,000 14,200 Raw Materials 16,000 12,500 How much is the total manufacturing cost? ANSWER : 287740 How much is the cost of goods manufactured? ANSWER : 284540 How much is the cost of goods sold? ANSWER : 287540 REGULATORY FRAMEWORK IN BUSINESS TRANSACTIONS PRE POST TEST 1 : NATURE AND FORM OF THE CONTRACT What happens if the price cannot be determined in accordance with the preceding articles? ANSWER : The contract is inefficacious Who cannot acquire property by purchase at a public or judicial auction? ANSWER : Public officers and employees What is required for the price to be considered certain? ANSWER : It must be sorted with reference to another thing certain What is a reasonable price determined by when the contract is inefficacious? ANSWER : It is a fixed price set by law What does Article 1477 state about the transfer of ownership? ANSWER : Ownership transfers upon delivery Under what condition can a stipulation that installments or rents paid shall not be returned to the vendee or lessee be considered valid? ANSWER : If it is unconscionable What is the implication of a sale of fungible goods according to Article 1464? ANSWER : The buyer becomes owner in common of a share What must be true for a contract of sale to be enforceable by court action under the Statute of Frauds? ANSWER : It must be signed by both parties What does Article 1488 define as fungible goods? ANSWER : Goods treated as equivalent by nature or usage What is the effect of a conditional sale according to Article 1488? ANSWER : Delivery does not transfer ownership until conditions are fulfilled Which of the following is NOT a characteristic of a contract of sale? ANSWER : Gratuitous What is the effect if the price in a contract of sale is simulated? ANSWER : The sale is void. What is considered "earnest money" in a contract of sale? ANSWER : Part of the purchase price and proof of the sale When does ownership transfer to the buyer in a contract of sale? ANSWER : Upon delivery of the thing sold Which of the following is true about fungible goods in a contract of sale? ANSWER : They are goods treated as equivalent to any other unit of the same kind. Which remedy is NOT available to the vendor in a sale of personal property payable in installments? ANSWER : Sue for moral damages automatically What type of sale involves a condition that must first be fulfilled before ownership transfers to the buyer? ANSWER : Conditional sale A contract where goods are specially manufactured for a customer is classified as: ANSWER : A contract of sale When is a sale by auction perfected? ANSWER : Upon the fall of the hammer or its equivalent What happens when a buyer gives option money? ANSWER : The buyer is not required to buy. PRE POST TEST 2 : EFFECTS OF THE CONTRACT WHEN THE THINGSOLD HAS BEEN LOST Under Article 1582, when must the vendee pay the price if the time and place for payment are not stipulated? ANSWER : At the time and place of delivery of the thing sold According to Article 1583, when can the buyer of goods refuse delivery in installments? ANSWER : If no agreement exists for installment delivery, If the seller delivers defective goods in one or more installments, c. If the buyer refuses without just cause to accept an installment Per Article 1584, when is the buyer deemed to have accepted goods delivered without prior examination? ANSWER : After a reasonable opportunity for examination Under Article 1585, which of the following actions constitutes acceptance of the goods by the buyer? A NSWER : Retaining the goods for a reasonable time without notifying the seller of rejection, b. Intimating to the seller that he accepts the goods, c. Performing any act inconsistent with the seller’s ownership According to Article 1586, what must the buyer do to hold the seller liable for breach of warranty after accepting the goods? ANSWER : Notify the seller within a reasonable time of the breach In Article 1587, if the buyer refuses to accept the goods, what is he obligated to do? ANSWER : Notify the seller of his refusal What happens under Article 1588 if the buyer unjustifiably refuses to accept the goods? ANSWER : The title to the goods passes to the buyer once they are placed at his disposal Under Article 1589, in which case is the vendee obligated to pay interest on the price of the thing sold? ANSWER : When it is stipulated in the contract, b. When the thing sold produces fruits or income, c. When the vendee is in default after judicial or extrajudicial demand According to Article 1590, when can the vendee suspend payment of the price? ANSWER : If he fears a disturbance in possession or ownership due to a vindicatory action Under Article 1593, when does the rescission of a sale of movable property take place by default? ANSWER : When the buyer fails to appear to receive the goods upon the expiration of the agreed period, b. When the buyer fails to tender the price at the agreed time Under Article 1582, what is the primary obligation of the vendee? ANSWER : To accept delivery and pay the price at the time and place stipulated According to Article 1583, when a contract stipulates installment delivery, what happens if the buyer neglects to pay for one installment? ANSWER : It depends on the terms of the contract and the materiality of the breach Under Article 1584, when is a buyer NOT entitled to examine the goods before paying the price? ANSWER : When the goods are marked “collect on delivery” Per Article 1585, which scenario does NOT indicate acceptance of goods by the buyer? ANSWER : The buyer stores the goods temporarily for inspection According to Article 1586, acceptance of goods by the buyer: ANSWER : Requires the buyer to pay the full price regardless of defects Under Article 1587, if the buyer refuses the goods without just cause, what is the buyer's obligation? ANSWER : To notify the seller of the refusal According to Article 1589, interest is owed by the vendee if: ANSWER : The thing sold produces income or fruits, b. Payment of interest was stipulated in the contract, c. The vendee is in default after a demand for payment Under Article 1590, what is NOT a valid reason for the buyer to suspend payment? ANSWER : An act of trespass on the property According to Article 1591, when can the seller sue for rescission of a sale of immovable property? ANSWER : Only when there are reasonable grounds to fear the loss of the property and its price Under Article 1592, when does the rescission of a contract for immovable property become final? ANSWER : When the seller files a judicial or notarial demand for rescission PRE POST TEST 3 : OBLIGATIONS OF THE VENDEE What does Article 1458 define as a contract of sale? ANSWER : An agreement transferring ownership of goods in exchange for money. Under Article 1483, which sales contract must be in writing? ANSWER : Sales of goods over a specified monetary threshold. What happens to a sale of goods under Article 1496 if the price is not determined? ANSWER : The price is determined by reference to market value. When does ownership transfer to the buyer under Article 1497? ANSWER : At the moment of delivery. Under Article 1504, what is the risk allocation for goods sold in transit? ANSWER : Risk depends on the terms of the agreement or delivery. What principle governs the sale of goods by sample per Article 1505? ANSWER : Goods must match the sample and conform to the contract. What must a seller ensure under Article 1507 when selling goods? ANSWER : That the goods are free from any charge or encumbrance not disclosed. Under what condition does Article 1510 excuse the seller from delivery? ANSWER : When an unforeseen event makes delivery impossible. When may the buyer return goods under Article 1512? ANSWER : If the seller fails to deliver goods conforming to the contract. When is a sale considered perfected according to Article 1475? ANSWER : When both parties agree on the object and the price. Under Article 1483, which sales contract must be in writing? ANSWER : Sales of goods over a specified monetary threshold. What happens to a sale of goods under Article 1496 if the price is not determined? ANSWER : The price is determined by reference to market value. Under what condition does Article 1510 excuse the seller from delivery? ANSWER : When an unforeseen event makes delivery impossible. When does ownership transfer to the buyer under Article 1497? ANSWER : At the moment of delivery. PRE POST TEST 4 : EXTINGUISHMENT OF SALE What extinguishes a sale under Article 1600? ANSWER : By the same causes as all other obligations What is required for conventional redemption to take place under Article 1601? ANSWER : The vendor reserves the right to repurchase Which of the following suggests an equitable mortgage? ANSWER : The purchaser retains part of the purchase price If a sale appears to be a sale with a right to repurchase, what is it presumed to be in case of ANSWER : An equitable mortgage What is the maximum period for exercising a right to repurchase if agreed upon? ANSWER : Ten years What is required before recording the consolidation of ownership in a real property sale? ANSWER : A judicial order What is included in the obligations of the vendor in case of redemption? ANSWER : The price of the sale, contract expenses, and necessary expenses Under Article 1619, what is legal redemption? ANSWER : The right to reacquire property under the same terms When can co-owners exercise the right of redemption? ANSWER : Only before the partition What is the effect of visible fruits on the land at the time of redemption? ANSWER : They are divided according to possession time What does Article 1603 emphasize about sales with the right to repurchase? ANSWER : They are presumed to be equitable mortgages in case of doubt What is a key characteristic of an equitable mortgage under Article 1602? ANSWER : The vendor remains in possession of the property Which of the following situations requires all co-owners to agree for redemption? ANSWER : Sale of a whole undivided property What right does Article 1610 reserve for creditors of the vendor? ANSWER : To exhaust the vendor's property first Under Article 1618, what happens to charges on the property upon redemption? ANSWER : They are cleared What determines the priority of adjoining landowners in exercising the right of redemption? ANSWER : The smaller area of land owned What is not a requisite for legal redemption by co-owners? ANSWER : Sale must be to a co-owner What is the time limit to exercise legal preemption or redemption? ANSWER : 30 days from notice Which article outlines the vendor's obligations upon redemption? ANSWER : Article 1616 What happens to leases executed in good faith by the vendee upon redemption? ANSWER : They must be respected by the vendor PRELIM EXAM REGULATORY FRAMEWORK IN BUSINESS TRANSACTIONS The parties to a contract of sale may stipulate that ownership will not pass until: ANSWER : The full price is paid. Which of the following describes a "sale by description"? ANSWER : The buyer relies on the seller's representation of the goods. What must be present for a price to be considered "certain"? ANSWER : It is determinable with reference to a certain thing. Which of the following is void under Article 1461? ANSWER : Sale of a vain hope or expectancy Who bears the expenses for the execution and registration of a sale, unless otherwise stipulated? ANSWER : The vendor Under the Statute of Frauds, which sale must be in writing to be enforceable? ANSWER : A sale of real property A contract of sale is perfected when: ANSWER : There is a meeting of minds on the object and price. What is the status of a sale when the price is left to the discretion of one party and not accepted by the other? ANSWER : Inefficacious Which of the following is an essential characteristic of a contract of sale? ANSWER : Consensual Who cannot acquire property at public or judicial auctions, under Article 1491? ANSWER : Executors of estates they manage Under Article 1582, what occurs if there is no specific agreement on the time and place of payment? ANSWER : It defaults to payment upon tender of delivery. According to Article 1583, when is the buyer justified in refusing goods delivered in parts? ANSWER : When installments cause significant inconvenience or material breach. When does the buyer have the right to examine goods under Article 1584? ANSWER : Before confirming acceptance unless waived by the contract. What constitutes an implicit acceptance of goods under Article 1585? ANSWER : Retaining and using the goods without notifying rejection. Under Article 1586, what condition absolves the seller from liability for warranty breach? ANSWER : The buyer fails to notify the seller of the breach promptly. What is the buyer’s responsibility after rejecting goods per Article 1587? ANSWER : Notify the seller while retaining the goods reasonably. What legal effect does wrongful rejection of goods have under Article 1588? ANSWER : The contract remains binding, and payment is due. What is the buyer’s obligation regarding interest under Article 1589? ANSWER : To pay interest from default or judicial demand. Under what scenario can the buyer suspend payment under Article 1590? ANSWER : Upon discovering a legitimate disturbance in property possession. When may a buyer pay despite delay in immovable sales under Article 1592? ANSWER : Before the seller formally seeks rescission. What action violates Article 1587 when rejecting goods? ANSWER : Rejecting goods without legitimate cause or communication.\ Under Article 1597, what is a seller’s recourse when goods remain unpaid for an extended period? ANSWER : The seller may rescind and recover damages after notice. When goods do not match the warranty as per Article 1599, what remedies exist? ANSWER : Buyer may claim damages or rescind the contract. What does recoupment mean under breach of warranty scenarios? ANSWER : Reduction in the payable amount corresponding to defects. How are actions for breaches in sales contracts resolved per Article 1594? ANSWER : Following chapter provisions specific to sales. What right does the seller retain under Article 1595 for unpaid goods? ANSWER : Sue for the contract price despite holding the goods. What damages can the seller recover under Article 1596? ANSWER : Direct and foreseeable losses from breach. When may the buyer demand specific performance under Article 1598? ANSWER : For clearly identified goods as per the agreement. What must the buyer establish to claim warranty breach damages under Article 1599? ANSWER : Proof of loss directly caused by defects or breach. When is contract rescission allowed for a buyer under Article 1599? ANSWER : Upon warranty breach with proof, even if goods are used. What does Article 1458 define as a contract of sale? ANSWER : An agreement transferring ownership of goods in exchange for money. When is a sale considered perfected according to Article 1475? ANSWER : When both parties agree on the object and the price. Under Article 1483, which sales contract must be in writing? ANSWER : Sales of goods over a specified monetary threshold. What happens to a sale of goods under Article 1496 if the price is not determined? ANSWER : The price is determined by reference to market value. When does ownership transfer to the buyer under Article 1497? ANSWER : At the moment of delivery. Under Article 1504, what is the risk allocation for goods sold in transit? ANSWER : Risk depends on the terms of the agreement or delivery. What principle governs the sale of goods by sample per Article 1505? ANSWER : Goods must match the sample and conform to the contract. What must a seller ensure under Article 1507 when selling goods? ANSWER : That the goods are free from any charge or encumbrance not disclosed. Under what condition does Article 1510 excuse the seller from delivery? ANSWER : When an unforeseen event makes delivery impossible. Which of the following suggests an equitable mortgage? ANSWER : The purchaser retains part of the purchase price