Gil Agrees to Buy Howe's Bakery on the Express Condition

question 32

Multiple Choice

Gil agrees to buy Howe's Bakery on the express condition that the bakery's suppliers extend the same credit terms to Gil that the suppliers currently extend to Howe. This approval is

• A) a concurrent condition.
• B) a condition precedent.
• C) a condition subsequent.
• D) an implied condition.

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Definitions:

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding direct production costs but including items like rent, utilities, and administrative salaries.

Periodic Inventory System

An accounting method where inventory levels and cost of goods sold are updated at specific intervals, rather than continuously.

Transactions

Financial events or exchanges between parties that have a monetary impact on the financial statements of a business.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made, used to prepare financial statements.