Which of the Following Statements Is Not Generally True of an Auction

question 32

Multiple Choice

Which of the following statements is not generally true of an auction?

• A)The call for bids is an invitation to treat
• B)The bidders are offerors
• C)There is no contract until the auctioneer accepts an offer on behalf of the seller
• D)If there is no reserve and the auctioneer refuses to sell to the highest bidder the vendor can be sued for specific performance of the contract

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Definitions:

Unamortized Acquisition Differential

The portion of the difference between the acquisition cost of an asset and its carrying value on the balance sheet that has not yet been amortized.

Equity Method

A method of accounting whereby an investor records its investment in an associate company at initial cost and subsequently adjusts the carrying amount of the investment to recognize the investor's share of the earnings or losses of the associate.

Amortization

The gradual reduction of a debt or the allocation of the cost of an intangible asset over a period.

Cost Method

An accounting approach for investments where the investment is recorded at cost, and income is recognized only when dividends are received.