Laborers Working on a Building Are Promised by Their Contractors

question 118

Multiple Choice

Laborers working on a building are promised by their contractors that their wages would be paid at the end of every month.The laborers also in return promise to work from the beginning of the subsequent month.When the laborers have worked for the entire duration of the month and are awaiting their wages at the end of the month,the contract is ______.

• A) void
• B) executory
• C) implied
• D) executed
• E) unilateral

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Definitions:

Amortization

A process of gradually writing off the initial cost of an asset over a period.

Interest Cost

Represents the total expense over the life of a borrowing, calculated as the difference between the amount borrowed and the amount repaid.

Service Cost

An expense recognized in the income statement of an employer for the cost of future pension benefits earned by employees during the current period.

Accrual-Basis Concepts

Accrual-basis concepts in accounting involve recording revenues when they are earned and expenses when they are incurred, regardless of when cash is received or paid.