Which of the Following Is Correct with Regard to Conditions

question 34

Multiple Choice

Which of the following is correct with regard to conditions subsequent?

• A) Conditions subsequent are quite common in contracts.
• B) A "sale or return" contract is an example of a contract with a condition subsequent.
• C) A condition subsequent must occur before performance is due under a contract.
• D) All of these are correct.

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Definitions:

Dividend Income

Earnings distributed to shareholders from the profits of a company, acquired through the ownership of its shares.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's profit or loss.

Controlling Interest

Ownership of a sufficient portion of a company's stock to influence or control its management and operations.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue.