Which of the following is true of a contract, the object of which has become unlawful after the creation of the contract?
A) The contract is still legal as the object was legal at the time of creating that contract.
B) The contract is illegal even if the parties don't complete the contractual agreement.
C) The parties of the contract will be discharged from that contract.
D) Both parties are still obligated to complete their contractual agreements.
C
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What is the effect of bad debts on revenue recognition under the proposed ASU?
A. Bad debts are recognized as an extraordinary item. B. Bad debts must be estimable in order to recognize revenue. C. Bad debts are deducted from revenue to calculate net revenue on the income statement, similar to sales returns. D. Bad debts are an expense.
A corporation may lower its cost of capital by shifting a portion of its total financing from a higher
cost source of capital, such as common equity, to a lower cost source of capital, such as debt. Indicate whether the statement is true or false