For a Contract to Exist All of the Following Criteria

question 14

Multiple Choice

For a contract to exist all of the following criteria must be met,except for

• A)it has been approved and the parties are committed to their obligations
• B)a contractual commitment in the form of a deposit
• C)it must have commercial substance
• D)it is legally enforceable

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Definitions:

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including materials and labor.

Net Income

The total earnings or profit of a company after subtracting all expenses, taxes, and costs from its total revenue.

Overstatement

A situation where figures or values are recorded in the financial statements higher than the actual or true values.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, after all purchases and sales have been accounted for.