Carlos and David Contract for the Sale of Five Hundred

question 51

Multiple Choice

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $195 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is

• A)entitled to recover the value of the lost cattle.
• B)not required to pay due to the bilateral mistake.
• C)not required to pay due to the unilateral mistake.
• D)required to pay because he assumed the risk the cattle might die.

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Definitions:

Cash Flow Statement

A report detailing how variations in balance sheet positions and income streams influence the cash and cash equivalents, segmented into operations, investments, and financial transactions.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.

Equipment

Tangible assets used in the operation of a business to produce goods or provide services.

Net Cash

Net cash typically represents the sum of cash and cash equivalents minus outstanding liabilities, indicating the liquid assets a company has on hand after accounting for its immediate obligations.