Kurt, a Computer Sales Representative, Ran a Small Restaurant Business

question 72

Multiple Choice

Kurt, a computer sales representative, ran a small restaurant business from his home to supplement his income. He converted his large living room into an eatery with minimal seating. His mother and brother managed the kitchen, while he coordinated orders and waited upon customers. Upon realizing that Kurt was running a restaurant, the landlord evicted Kurt and his family. In the scenario, we can infer that ________.

• A) Kurt received the rented property in conditions that were uninhabitable
• B) Kurt was evicted for using the rented property for illegal or nonstipulated purposes
• C) Kurt failed to comply with the building codes of the area in which he lived
• D) Kurt failed to claim his freehold estate on the rented property within the stipulated period

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Definitions:

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB).

Amortized

In finance, to amortize a debt means to reduce or extinguish it by making regular payments over a period of time, effectively decreasing the principal amount along with interest.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the premium paid over the fair market value of the net identifiable assets of the business.

Borrowing Costs

Borrowing Costs are the interest and other costs that an entity incurs in connection with the borrowing of funds.