Ron Enters into a Contract to Paint Paul's House

question 28

Multiple Choice

Ron enters into a contract to paint Paul's house.When Paul decides on a color,Ron will buy the paint and paint the house for the price of $2,500.This contract is governed by:

• A)the common law of contracts because this is a mixed contract (one for services and goods).
• B)the common law of contracts because the predominant factor of the contract is for the sale of services and not goods.
• C)the Uniform Commercial Code because a sale of goods is involved.
• D)both the common law and the Uniform Commercial Code.

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Definitions:

Long-term Liabilities

Debts or obligations that are due beyond the next twelve months.

Correcting Entries

Adjustments made in the accounting records to rectify mistakes made in previous financial transactions or entries.

Post-closing Trial Balance

A list of all accounts and their balances after closing entries are made, used to verify the equality of debits and credits.

Balance Sheet Accounts

Accounts that are reported on the balance sheet and include assets, liabilities, and equity sections, reflecting the financial position of a company at a specific time.