Arthur Made a Bid at an Auction by Calling Out

question 37

Multiple Choice

Arthur made a bid at an auction by calling out the amount of $250. The auctioneer acknowledged Arthur's bid. There were no higher bids, and before the fall of the auctioneer's hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?

• A) Arthur's bid is an ordinary offer that can be revoked.
• B) Arthur's bid is firm and cannot be withdrawn.
• C) Since the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller.
• D) Since the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective.

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Definitions:

Depreciation Expense

This represents the allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Useful Life

The estimated duration of time that an asset is expected to remain functional and productive for its intended purpose, affecting depreciation calculations.

Straight-Line Basis

A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its useful life.

Salvage Value

The estimated value remaining in an asset after it has served its purpose.