Question

Which of the following does not apply to a seller who is an agent?

Has control over goods or services
Not primarily responsible for providing goods or services to customer
Not exposed to risks associated with holding inventory
Primary performance obligation is to facilitate the transfer of goods or services

Answer 1

The correct option that does NOT apply to a seller who is an agent is C) Not exposed to risks associated with holding inventory.

Step-by-step explanation:

An agent, in the context of business, refers to a person or entity that is authorized to act on behalf of another party, known as the principal. Agents facilitate the sale of goods or services between the principal and the customer, but they do not assume ownership or control over the goods or services being sold.

Therefore, they are not exposed to the risks associated with holding inventory, since they do not own the inventory themselves.

For example, let's say a real estate agent is selling a house on behalf of a homeowner. The agent acts as an intermediary, facilitating the transfer of the property from the homeowner to the buyer. However, the agent does not become the owner of the house and, therefore, is not exposed to the risks associated with owning the property. Option C