The Purchase of an Asset for Cash

question 82

Multiple Choice

The purchase of an asset for cash

• A)increases assets and stockholders' equity.
• B)increases assets and liabilities.
• C)decreases assets and increases liabilities.
• D)leaves total assets unchanged.

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Definitions:

Statute of Frauds

A legal doctrine requiring certain contracts to be documented in writing and officially signed, aimed at preventing fraudulent claims and enforcing agreements.

Oral Contract

An agreement between parties that is spoken and not written, yet is legally binding under certain conditions.

Indefinite Period

A time span without a specified end date.

Merger Clause

A contract clause providing that the written contract is the complete expression of the parties’ agreement. Also called integration clause.