Distinguish between a contract and a gift. Give an example of each
The factor that distinguishes a contract from a gift is that a gift lacks consideration. Consideration can be an act or a promise. Normally, it is either doing or promising to do something you are not legally required to do or refraining from doing something you are legally entitled to do. A contract usually consists of mutual promises, but a gift is a one-way transaction. An example of a contract is: Jane promises to pay Whit $1,500 to repair her roof by October 1 and Whit agrees. Each promise is consideration for the other promise. An example of a gift is: Myra hands Kim four tickets to a soccer tournament, saying, "We hope you and your family can use these to go to see Debra play on Saturday." Kim says, "Thanks, we'd love to go." This is an inter vivos gift whereby Myra intends to transfer ownership immediately. She delivered the tickets to Kim, who accepted them.
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Exhibit 21-1 The Raymond Corporation reported $11,000 of net income for the current year and also uses the visual inspection method for completing the statement of cash flows. The following additional information relates to Raymond for the year: Subsidiary gain included in investment income under the equity method $ 370 Decrease in inventory 80 Loss on disposal of equipment 900 Proceeds from
disposal of equipment 1,400 Depreciation expense 1,200 Acquisition of treasury stock 650 Increase in accounts payable 290 Acquisition of new securities (accounted for using the equity method) 500 Decrease in deferred income tax liability 210 Early retirement of bonds payable at book value 1,000 Increase in interest receivable 30 ? Refer to Exhibit 21-1. What is Raymond's net cash provided by operating activities? A) $11,540 B) $12,210 C) $12,860 D) $14,800
The type of product costing system used by a company is dictated by the
A) cost flow assumptions made by the company. B) production process of the product. C) inventory system used by the company. D) selling price of the product.
Which of the following occurs if both a principal and an agent cannot agree on the compensation?
A) The principal is no longer bound by the duty of compensation. B) Compensation will be calculated on the basis of what is reasonable or customary. C) Compensation will be calculated according to government wage rates. D) Compensation will be determined by the full faith and credit clause of the U. S. Constitution.
The degree to which a measure is free from random error is its reliability.
Answer the following statement true (T) or false (F)