Sable and Rex Agree While Talking on the Phone to Form

question 15

Multiple Choice

Sable and Rex agree while talking on the phone to form a partnership-The Home Source-to deal in transfers of real property.To be enforceable,their agreement must

• A)be filed in the appropriate state office.
• B)be in writing.
• C)involve the exchange of valid consideration.
• D)not involve a third party.

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Definitions:

Prepaid Insurance

An asset account that represents insurance paid in advance, which is expensed as it is used or over time.

Accounts Payable

A liability account on a company's balance sheet representing money owed to creditors for goods and services purchased on credit.

Inventory

Items held for sale in the ordinary course of business, as well as materials and components that will be used in the production of goods to be sold.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.