Which of the Following Is True Regarding the Preexisting Duty

question 31

Multiple Choice

Which of the following is true regarding the preexisting duty rule?

• A) Unforeseen circumstances are an exception, but additional work and past consideration are not exceptions.
• B) Additional work is an exception, but unforeseen circumstances and past consideration are not exceptions.
• C) Past consideration is an exception, but unforeseen circumstances and additional work are not exceptions.
• D) Unforeseen circumstances and additional work are exceptions, but past consideration is not an exception.
• E) Unforeseen circumstances and past consideration are exceptions, but additional work is not an exception.

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Definitions:

Cash

A company's money in the form of currency or in bank accounts that is immediately available for business use.

FOB Destination

A shipping term indicating that the seller bears the shipping costs and retains ownership of the goods until they are delivered to the buyer's location.

Revenue Recognition

The accounting principle dictating the specific conditions under which revenue is recognized or accounted for.

Ownership Transfer

The process by which the title of property or assets is moved from one party to another, affecting legal rights and responsibilities.