In Certain Circumstances, Mutual Assent Between the Contracting Parties May

question 2

Multiple Choice

In certain circumstances, mutual assent between the contracting parties may be broken, thus invalidating the contract. Which of the following defects to mutual assent involves compelling a person to act by the use of force?

• A) One of the parties is under duress.
• B) One of the parties is under undue influence.
• C) One of the parties is under menace.
• D) One of the parties is committing fraud.

Distinguish between the recording of cash sales and credit sales, including the impact of sales returns and allowances.

Understand the principles of recording transactions in the general journal.

Calculate sales tax on transactions and understand its implications on sales and returns.

Prepare journal entries for cash and credit sales, including sales returns and allowances.

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Definitions:

ROA

Return on Assets, an indicator of how profitable a company is relative to its total assets, showing how efficient management is at using assets to generate earnings.

ROE

Return on Equity: It's a financial performance indicator that is computed by dividing the net income by the equity held by shareholders.

Equity/Debt Ratio

An economic indicator revealing the balance between shareholder equity and borrowed funds in financing company assets.

Level 3 Assets

These are financial assets and liabilities that are hard to value because they do not have a readily observable market price, often requiring significant estimation in their valuation.