Which of the Following Is True of Open Priced Term

question 31

Multiple Choice

Which of the following is true of open priced term contracts?

• A) the contract is void due to the failure to specify a required term of the contract
• B) the price becomes the reasonable price at the time the contract was entered into
• C) the price becomes the reasonable price at the time the goods are delivered
• D) the price is determined by the court applying a reasonable price at whatever time the court deems appropriate to fairness

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Straight-line Method

A depreciation method where the value of an asset is reduced evenly over its useful life.

Journal Entries

Records of financial transactions in the accounting system, indicating the accounts and amounts to be debited and credited.

Equipment Cost

The purchase price of machinery and tools required for manufacturing or providing services, excluding ongoing operating expenses.