After an Accident with a Driver for Onyx Security Company,Paul

question 23

Multiple Choice

After an accident with a driver for Onyx Security Company,Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant

• A)bars recovery only if Onyx pays.
• B)is an illusory contract.
• C)is barred by the preexisting duty rule.
• D)is unconscionable.

---

Definitions:

Deferred Tax Asset

A tax benefit that refers to a reduction in a company's future tax liability due to deductible temporary differences and carryforwards.

FASB

The Financial Accounting Standards Board (FASB) is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest.

Temporary Difference

A difference that arises between the tax bases of assets or liabilities and their carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.

Bad Debts Expense

The cost to a company resulting from the inability to collect a receivable because a customer is unable to fulfill their payment obligations.