An Exchange of Value Between Two Entities That Yields a Change

question 155

Multiple Choice

An exchange of value between two entities that yields a change in the accounting equation is called:

• A)The accounting equation.
• B)Recordkeeping or bookkeeping.
• C)An external transaction.
• D)An asset.
• E)Net Income.

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Definitions:

Breach

The act of violating a law, duty, or agreement, which can result in legal consequences or termination of the contract.

General Rules of Contract

Fundamental principles that govern the formation, interpretation, and enforcement of contractual agreements.

Capacity

The legal capability to understand the terms of a contract and to be held accountable for its obligations, or the maximum output or production ability of a facility.

Agency Relationship

A fiduciary relationship where one party (the agent) acts on behalf of another (the principal) in dealing with third parties.