Ben and Ivy Enter into a Contract Under Which Ben

question 25

Multiple Choice

Ben and Ivy enter into a contract under which Ben agrees to cater Ivy's wedding in exchange for a cash down payment. The contract expressly prohibits any transfer of rights. A contract right may be transferred, however, if the transfer involves

• A) ​a right to receive payment.
• B) ​a right to Ben's services.
• C) ​rights under Ivy's insurance policy against Ben's failing to perform.
• D) ​a right whose transfer is otherwise expressly prohibited by statute.

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Definitions:

Gross Profit Method

An inventory estimation technique that calculates cost of goods sold and the ending inventory balance using a gross profit margin.

Interim Financial Reports

Financial statements that are prepared and presented for a period shorter than a fiscal year, often quarterly or semi-annually, to provide timely information to stakeholders.

Gross Profit Method

An inventory estimation technique calculating the cost of goods sold by applying a gross profit margin to sales, used for interim financial reporting and estimating inventory levels.

Beginning Inventory

The value of stock held by a business at the start of an accounting period.