Sarah Wanted an Antique Lamp for Her Bedroom

question 178

Multiple Choice

Sarah wanted an antique lamp for her bedroom. While in a second-hand shop, she saw a lamp that she really wanted marked $100. She offered the owner $75 for it. He said "I'll take $95." She answered "$80!" He said, "Lady, you're pushing me a bit, aren't you? I'll take $90, that's it." She said "OK I'll pay $90 if you throw in this old 'Vote-for-Pearson' button." He said, "Forget it, lady, my shop is closed," and asked her to leave. She said, "OK, I accept your offer of $95." He made no response. If she sues for breach of contract, which of the following is true?

• A) There is no contract because his offer to sell for $95 lapsed after a reasonable time.
• B) There is a contract because at one time he offered to sell the lamp for $95 and she accepted it.
• C) There is a contract because he wanted to sell the lamp for $95 and she was willing to pay that much.
• D) There is no contract because his offer to sell the lamp for $95 was rejected by counter-offer, and her offer to buy it for $95 wasn't accepted.
• E) There is no contract because his offers to sell the lamp for $95 and $90 were revoked and he didn't accept her offers.

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Definitions:

Balance Sheet Accounts

Balance Sheet Accounts represent the accounts that are reported on the balance sheet and include assets, liabilities, and shareholders' equity accounts.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred, ensuring compliance with the accrual basis of accounting.

Time Period Assumption

An assumption that accountants can divide the economic life of a business into artificial time periods.

Economic Life

The expected period over which an asset remains useful to its owner or contributes to an enterprise's cash flows.