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The Rule That Doing or Promising to Do What One

question 14

Multiple Choice

The rule that doing or promising to do what one is already legally bound to do is not consideration applies to a part payment made in satisfaction of a(n) __________ debt.


Definitions:

Margin of Safety

The difference between actual or estimated sales and the sales level necessary to break even, indicating the risk level of not reaching break-even point.

Sales

The total amount of money generated from selling goods or services.

Degree of Operating Leverage

A ratio that measures the sensitivity of a company's operating income to a percentage change in revenue.

High-low Method

A technique used in accounting and finance to estimate variable and fixed components of a cost based on the highest and lowest activity levels.

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