Sal, an Accountant, Contracts with Torre to Act on Torre's

question 125

Multiple Choice

Sal, an accountant, contracts with Torre to act on Torre's behalf during a tax audit. Their contract does not expressly state that Sal will be paid for the service. Most likely, Torre must pay

• A)the customary compensation for the services.
• B)only the expenses accrued in the course of the audit.
• C)only the costs incurred if he accountant fails to perform.
• D)nothing.

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Definitions:

Security Interest

A security interest is a legal claim or lien on collateral, granted to a lender or creditor to secure repayment of a debt or loan.

Perfected

In legal terms, it refers to the completion of all required steps to enforce a security interest or lien against third parties, particularly after default.

Priority

The established order of importance or urgency given to claims, debts, rights, or actions in legal, financial, or other operational contexts.

Floating Lien

A lien on a debtor's assets that changes over time with the inventory levels or changes in collateral included under the lien.