In the Smith V

question 40

Multiple Choice

In the Smith v.Riley case referenced in the textbook,how did the Tennessee Court of Appeals rule regarding whether a purchase for "the sum of One Dollar ($1.00) and other good and valuable consideration" was sufficient consideration to support an agreement?

• A)The Court ruled that the purchase amount was sufficient consideration.
• B)The Court ruled that the purchase amount was insufficient consideration,but only because the sale of an interest in a lease was involved.
• C)The Court ruled that the purchase amount was insufficient consideration,but only because a sale of goods was involved.
• D)The Court ruled that the purchase amount was insufficient consideration,but only because a domestic partnership was involved.
• E)The Court ruled that the purchase amount was insufficient consideration because over $50,000 was at issue.

---

Definitions:

Accounting Records

Documentation and books kept for the purpose of tracking all financial transactions, assets, liabilities, and equity of a business.

Net Income

The amount of money left over after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

End-of-Period Spreadsheets

Tools used in accounting to compile financial information at the end of an accounting period, aiding in the preparation of financial statements.

Current Ratio

A financial metric indicating a firm's capability to settle short-term debts due within a year, derived by dividing current assets by current liabilities.