Apps LLC Enters into a Contract with Birk, the Chief

question 24

Multiple Choice

Apps LLC enters into a contract with Birk, the chief executive officer of Corporate Sales Inc., to create an app for the firm. To fulfill the contract, Apps hires Dave as a student intern. With respect to the app contract, Dave is

• A)an intended beneficiary.
• B)an incidental beneficiary.
• C)a promisee.
• D)a promisor.

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Definitions:

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and written off as a loss.

Quality of Receivables

An assessment of the likelihood that the receivables will be collected on time, reflecting the creditworthiness of a company's customers.

Likelihood of Collection

The probability that debts owed to a company will be paid by its debtors.

Materiality Constraint

An accounting principle that states financial information is material if its omission could influence decisions.