Fact Pattern 11-5 Dex and Carmen Are in an Auto Accident

question 22

Multiple Choice

Fact Pattern 11-5 Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
-Refer to Fact Pattern 11-5.The agreement between Dex and Carmen is​ 

• A) ​a covenant not to sue. 
• B) ​an illusory promise. 
• C) ​a release. 
• D) ​promissory estoppel.

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Definitions:

Average Cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.

Cost Of Merchandise Sold

The total expense of buying and preparing merchandise for sale, including the cost of the goods themselves and any additional expenses related to their sale.

Gross Profit

The amount of money a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

FIFO Perpetual

An accounting method where the first items placed in inventory are the first ones sold, continuously tracking inventory levels.