Why Is There No Consideration When a Party Does What

question 82

Multiple Choice

Why is there no consideration when a party does what it is already legally obligated to do?

• A) Because there will not be adequate consideration.
• B) Because promising to do something you are obligated to do is an illusory promise.
• C) Because of the legal doctrine of promissory estoppel.
• D) Because there is no detriment.

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Definitions:

Eliminate Unrecognized

A process in accounting to remove unrealized gains or losses from the books, often in the context of consolidation accounting to avoid double counting.

Intra-entity Gross Profit

The profit realized from transactions conducted within different divisions or segments of the same company, often eliminated in consolidated reporting.

Eliminate Intra-entity Transfer

The process of removing transactions between entities within a single organization from the consolidated financial statements to prevent double counting.

Intra-entity Transfer

Transactions involving assets, services, or funds between units or divisions within the same legal entity.