Having Recently Made a Fortune by Inventing and Selling a New

question 11

Multiple Choice

Having recently made a fortune by inventing and selling a new piece of software, Matt heard that his friend, Lois, was having a hard time obtaining a bank loan.Matt therefore generously promised the bank that he would be responsible for the debt if Lois failed to repay a loan.That promise will be enforceable against Matt if

• A)he provides a notarized copy to the bank.
• B)Lois repeats Matt's promise in a document that she signed.
• C)he provides it to the bank in a signed document.
• D)the promise is contained in a document that Lois and the bank signed.
• E)either Lois or the bank provides some positive benefit to Matt personally.

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Definitions:

Temporal Method

An accounting method for converting foreign currency transactions based on exchange rates at the time the transactions are made.

Translation Exchange Rates

The rates used to convert the financial statements of a company into the currency of a different country for reporting purposes.

Historical Rate

Refers to the exchange rate between two currencies at a past date, useful for historical financial analysis.

Pooling of Interests Method

An accounting method that treats the companies involved in a merger or acquisition as if they have always been a single entity, combining their financial statements without recognizing any new goodwill.