Which of the Following Is the Best Example of a Transaction

question 28

Multiple Choice

Which of the following is the best example of a transaction that will be presumed to have the necessary intention to be legally enforceable?

• A)A father promises to buy his daughter a pizza
• B)A doctor promises to visit her sick sister for a check-up
• C)A borrower promises to repay a loan
• D)A university student promises to meet his friends at the pub

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Definitions:

Interest Cost

Represents the total expense over the life of a borrowing, calculated as the difference between the amount borrowed and the amount repaid.

Service Cost

An expense recognized in the income statement of an employer for the cost of future pension benefits earned by employees during the current period.

Accrual-Basis Concepts

Accrual-basis concepts in accounting involve recording revenues when they are earned and expenses when they are incurred, regardless of when cash is received or paid.

Projected Benefit Obligation

The present value of all benefits attributed by the pension benefit formula to employee service rendered up to that date.