As Compared to Natural Accounts, FUNCTIONAL ACCOUNTS

question 36

Multiple Choice

As compared to natural accounts, FUNCTIONAL ACCOUNTS:

• A) are the accounts to which various costs are charged in the normal accounting cycle.
• B) show the purpose for which expenditures are made.
• C) include items such as storing, salaries, and taxes.
• D) All of these.
• E) Both are the accounts to which various costs are charged in the normal accounting cycle; and include items such as storing, salaries, and taxes.

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Definitions:

Money Owed

Refers to funds that are due to be paid by one party to another under the terms of a contract or as a recognized debt.

Unforeseen Circumstances Rule

A principle in contract law that allows parties to a contract to be excused from fulfilling their obligations due to circumstances that were unforeseeable at the time the contract was made.

Preexisting Duty

An obligation that one party is already legally required to perform and which cannot serve as consideration for a new contract.

Bilateral Contract

A bilateral contract involves two parties who each promise to perform certain acts in exchange for the other's promise, establishing mutual obligations.