Which of the Following Is Not a Transaction to Be

question 46

Multiple Choice

Which of the following is not a transaction to be recorded in the accounting records of an entity?

• A)Investment of cash by the owners.
• B)Sale of product to customers.
• C)Receipt of a plaque recognizing the firm's encouragement of employee participation in the United Way fund drive.
• D)Receipt of services from a "quick-print" shop in exchange for the promise to provide advertising design services of equivalent value.

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Definitions:

Binding Promise

A pledge or commitment that legally compels the promisor to fulfill the terms of the promise.

Illusory Promise

An agreement that fails to bind the promisor since it lacks the definiteness or the possibility of performance, making it unenforceable.

Pre-existing Duty Rule

A legal principle stating that a party's promise to perform a duty that is already owed under a contract does not constitute valid consideration for a new agreement.

Synthetic Fuel Oil

A liquid fuel produced from coal, natural gas, or biomass through chemical processes rather than by natural geological processes.