When a contractual agreement is formed between two parties, but if one party cannot perform because a previously unforeseeable circumstance makes performance impossible, which party is relieved of its duties?
A) only the party that was offering to perform
B) only the party that was receiving the performance
C) both parties, since the contractual agreement would be discharged
D) both parties, but only if the court finds substantial performance
C
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Last year Rosenberg Corp. had $195,000 of assets, $18,775 of net income, and a debt-to-total-assets ratio of 32%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE?
A. 4.36% B. 4.57% C. 4.80% D. 5.04% E. 5.30%
Which one of the following accounts most likely would appear on the income statement of a merchandise company, but not on the income statement of a service company?
a. Cost of Goods Sold b. Selling Expenses c. Administrative Expenses d. Income Tax Expense
The correction of an error in the financial statements of a prior period should be reflected, net of applicable income taxes, in the current
a. income statement after income from continuing operations and before extraordinary items. b. income statement after income from continuing operations and after extraordinary items. c. retained earnings statement after net income but before dividends. d. retained earnings statement as an adjustment of the opening balance.
Which of the following is a constant control method?
a. budgeting b. audits c. reports d. standing plans