What are the two most common types of contracts?
Two kinds of contract are:
a. Express contract which has terms spelled out by the parties, usually in writing.
b. Implied contracts are contracts that the courts infer from company policies and the behavior of the parties or that are implied from the law.
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Mufasa is president and sole shareholder of Lion King, Inc. Lion King, Inc. wishes to borrow money, but to do so, the bank requires Mufasa to orally agree to personally pay the debt of the corporation if Lion King, Inc. cannot. Mufasa's guarantee to repay is:
a. enforceable under the parol evidence rule. b. unenforceable because there is no insurable interest. c. unenforceable because of their relationship. d. unenforceable because it is not in writing.
Which of the following risks results when the auditor uses an insufficient test procedure, resulting in the auditor's ill-informed conclusion that material errors do not exist, when, in fact, they do?
A. Business risk B. Detection risk C. Audit risk D. Inherent risk