A Contract for the Sale of Goods That Are Not

question 20

Multiple Choice

A contract for the sale of goods that are not necessities will be enforceable where entered into with a person of impaired intellectual capacity unless:

• A)The impaired person understood the nature of the agreement and the other party did not know about the impaired person's lack of capacity.
• B)The other party knew about the impaired person's lack of capacity and the impaired person was not capable of understanding the nature of the agreement being entered into.
• C)The impaired person was incapable of understanding the nature of the agreement even though the other party did not know about the impaired person's lack of capacity.
• D)The contract was for luxury goods.

Comprehend the implications of selling receivables.

Understand the methods and rationale for estimating uncollectible accounts.

Calculate the estimated uncollectible accounts using the percentage of sales and analysis of receivables methods.

Record journal entries for estimating, adjusting, and writing off uncollectible accounts receivable.

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Definitions:

Taxable Income

The portion of an individual or entity's income that is subject to taxation, after deductions and exemptions, according to the law.

Deductions

Expenses or specific amounts that can be subtracted from one's gross income to reduce the taxable income.

Rate Structure

The system or plan for pricing services, often used in reference to utilities like electricity, water, and telecommunications, outlining how rates vary based on usage levels or time of use.

Tax Base

The measure or value upon which a tax is levied.