Anderson, a City Employee, Collected Garbage Along Smyth's Street on Thursday

question 11

True/False

Anderson, a city employee, collected garbage along Smyth's street on Thursday of each week. One day Smyth said to Anderson: "You have done such a good job; I will give you $10 when you come by next week." The next week, when Anderson made his regular garbage pickup for the city, he met Smyth and asked for the $10. Smyth refused to pay. Smyth is not obliged to pay Anderson the $10, because his promise was gratuitous.

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Definitions:

Intragroup Transfer

Transactions between companies that are part of the same corporate group, such as the sale of goods or services, transfer of assets, or sharing of resources.

Inventories

Quantifiable goods or materials held by a company for the purpose of sale in the ordinary course of business, production, or use in creating goods and services.

Depreciable Asset

An asset that decreases in value over time due to use, wear and tear, or obsolescence and can be written off against income.

Useful Life

The estimated period over which an asset is expected to be usable by an entity, or the number of production or similar units expected to be obtained from the asset by an entity.