The Emmett School (ESD) District Contracts with the GoldenFarms Dairy

question 14

Multiple Choice

The Emmett School (ESD) district contracts with the GoldenFarms Dairy for "all of the milk" GoldenFarms can produce during ESD's current school year. The contract specifies a price, but no exact quantity of milk to be purchased is set in the contract. This contract is a(n) :

• A) invalid contract because no quantity is set.
• B) valid requirements contract.
• C) valid output contract.
• D) invalid contract because consideration is missing.

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Definitions:

Withdrawal

The process of removing funds from a bank account or investment.

Prepaid Insurance

Coverage payments made in advance that are recorded as assets and then expensed over the period that the insurance policy covers.

Advance Payment

Payment made to a supplier or service provider before receiving the goods or services.

Expense

Expenditures made by a business during the revenue generation process.