Which of the Following Is Usually Not a Requirement for a Contract

question 440

Multiple Choice

Which of the following is usually not a requirement for a contract to be valid?

• A) offer and acceptance
• B) purpose of contract must be legal
• C) contractual capacity
• D) all of the other choices are required
• E) none of the other choices are required

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Definitions:

Effective-interest Method

A technique used in finance to calculate the actual interest rate on a bond or loan, taking into account the effect of compounding over the period.

Interest Expense

The cost incurred by an entity for borrowed funds; it is a non-operating expense shown on the income statement.

Straight-line Amortization

A method of reducing the carrying amount of an intangible asset over a fixed period of time in a systematic and rational manner.

Premium Amortization

The gradual expense or reduction of the premium paid above the par value of a debt security over its remaining term.