When an Entrepreneur Purchases an Existing Business,he or She Essentially

question 71

True/False

When an entrepreneur purchases an existing business,he or she essentially is purchasing its future profit potential.

Understand the concept and elements of consideration in contracts.

Distinguish between bilateral and unilateral contracts.

Identify the enforceability of promises and modifications in preexisting contracts.

Analyze the legal effect of an illusory promise and gratuitous promises in contract law.

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Definitions:

Capital Account

The capital account in financial accounting represents where adjustments in assets and liabilities are recorded, correlating to transactions involving investments or loans.

Liquidating Partnership

A process where a partnership ends its operations, sells off its assets, and pays its liabilities, distributing the remaining assets to the partners based on their share in the partnership.

Insolvent

A financial state where an entity cannot meet its financial obligations as they come due.

Personal Creditors

Individuals or entities to whom a person owes money, as opposed to business or corporate creditors.