The Owner of a Small Consulting Business Paid for a New

question 85

Multiple Choice

The owner of a small consulting business paid for a new copy machine on his company credit card. This item is listed as which of the following on the company's balance sheet?

• A) owner's equity
• B) loans payable
• C) an asset
• D) a liability

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Definitions:

Consideration

A value that is promised, given, or received by a party in a contract, making the agreement legally enforceable.

Justifiable Reliance

The reasonable trust placed by one party in the representations of another, particularly in situations leading to contracts or agreements.

Noncontractual Promise

An assurance or pledge not bound by a formal contract and generally not enforceable by law.

Material Misrepresentation

Providing false or misleading information of significant importance, intentionally or accidentally, which can impact contractual agreements or decisions.