Which of the Following Is an Example of a Situation

question 38

Multiple Choice

Which of the following is an example of a situation where the court will consider adequacy of consideration?

• A) When someone purchases a TV for $500 and later discovers it is worth less than $100.
• B) When someone purchases a car which is later subject to a manufacturer recall.
• C) When someone purchases a house and discovers later that property values in the neighborhood are falling.
• D) When someone divests himself of all his assets for a very small amount of money and then declares bankruptcy.
• E) The court never considers adequacy of consideration.

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Definitions:

Work in Process

Inventory that includes materials that are currently being processed into finished goods but are not yet complete.

Total Costs

The aggregate of all expenses incurred by a business, including both fixed and variable costs.

Final Production Department

The last stage in a manufacturing process where products are completed and ready for sale or distribution.

Completed Goods

Products that have undergone all stages of production and are ready for sale or distribution to customers.