Brett Offers to Sell His Old but Functioning Cell Phone

question 75

Multiple Choice

Brett offers to sell his old but functioning cell phone to James for $65.James says he will accept the offer if Brett lowers the price to $60.James has

• A) made an unequivocal acceptance.
• B) made a counteroffer.
• C) demonstrated the exculpatory rule.
• D) entered into an option contract.
• E) entered into an executory contract.

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Definitions:

Unearned Liability

A liability on the balance sheet representing revenues received but not yet earned, typically because the service or good has not yet been delivered.

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments, instead being sold at a discount from their face value and maturing at said value.

Discount Amortization

Discount Amortization refers to the process of gradually reducing the book value of a bond discount over the life of the bond until it reaches its par value.

Interest Expense

This represents the cost incurred by an entity for borrowed funds, which can include loans, bonds, or lines of credit.