A Contract Is Created by Which the Terms Are Stated

question 10

Multiple Choice

A contract is created by which the terms are stated to be for consideration in the amount of $3,000. If typewritten in the contract is the term "four thousand dollars," while the amount of $3,000 is printed within the form:

• A) the contract will be interpreted to be for $3,000.
• B) the contract will be interpreted to be for $4,000.
• C) there is a contract but the courts will not specify the dollar amount, as a conflict exists.
• D) a compromise settlement amount of $3,500 will be used.

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Definitions:

Doubtful Accounts

Doubtful accounts represent receivables that a company is uncertain to collect, typically categorized separately to reflect potential losses.

Cash Discount

A reduction in the invoice amount by the seller if the buyer pays their bill within a specified time frame, incentivizing prompt payment.

Retail Customers

Individuals who purchase goods and services for personal use from retailers, as opposed to wholesale customers.

Financing Charge

Interest or fees paid by a borrower for the use of credit or the extension of existing credit.