Joe Offered to Sell Harry His Car for a Specific

question 93

Essay

Joe offered to sell Harry his car for a specific price and Harry indicated that he needed some time to think about it. Two days later, Joe sold the car to a third party. That afternoon Harry phoned Joe and told Joe that he had decided to accept the offer and that he'd buy the car. Joe told him that it was too late; he had sold it to someone else. Harry said that it was offered to him first, and he insisted that he go through with the contract. Explain the legal liability of the parties.

Understand and explain the importance of ethics in accounting.

Recognize the principles affecting financial reporting, such as the going-concern principle.

Analyze and apply accounting concepts to prepare key financial statements and assess transactions.

Understand the impact of foreign currency fluctuations on financial transactions and statements.

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Definitions:

Accounting

The systematic process of recording, analyzing, summarizing, and reporting financial transactions of a business or individual to ensure accurate financial statements.

Investments

Financial assets or items acquired with the intention of generating income or profit.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity without having full control or joint control.

Fair Value Option

An accounting option allowing financial assets and liabilities to be recorded at their fair value, with changes in fair value recognized in the income statement.