Question

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

Multiple Choice

A ) Has control over goods or services

B) Not primarily responsible for providing goods or services to customer

C) Not exposed to risks associated with holding inventory

D) Primary performance obligation is to facilitate the transfer of goods or services

Answer 1

Ans is A) Has control over goods or services

Explanation: as per IFRS 15 definition of principal, it has control over goods and services i.e deciding factor for price, delivery etc. lies with principal, and primarily responsibility for provision for goods and services is on principal also holding inventory risk with principal only on the other side agent responsibility is mainly facilitation of delivery of transfer of goods and services and booking revenue for commission only. So option 1 is associated with principal only so it does not apply to agent and correct, other 3 options are incorrect.