A Agrees to Paint B's House

question 57

Multiple Choice

A agrees to paint B's house.B then says to A,"If you paint my house,I'll give you $500.00." In this situation

• A)the first agreement does not include the price,but the second agreement does.
• B)together,the promise to pay and the first agreement to paint form one whole contract.
• C)the entering into the main contract is the consideration for the collateral contract.
• D)the promise to pay $500.00 is collateral to the first agreement to paint.
• E)all of the above

---

Definitions:

Bottom-line Profit

The net income or the final profit figure after all expenses, taxes, and costs have been subtracted from total revenues.

Net Realisable Value Method

An accounting technique used to value inventory or assets, determining the estimated selling price in the ordinary course of business minus any costs necessary to make the sale.

By-product Revenue

Revenue generated from secondary products produced during the manufacturing process of a primary product.

Joint Process Costs

Costs incurred during a production process that yields multiple products simultaneously until the point of separation where products can be identified individually.