A contractual relationship in which an individual must act in the best interests of a principal when dealing with a third party is termed: O A lease arrangement O A tenant-landlord relationship O A joint venture contractual arrangement O An agency relationship
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- Mutual agency is defined as: A. a mutual agreement B. the right of all partners to represent the companys normal business operations C. a synonym for partnership D. a partnership between two partnershipsWhich one of the following is true about a firm commitment? Select one: a. A firm commitment is a contract that allows both the buyer or seller an option to engage (or not) in a long-term transaction. b. A firm commitment is a transaction that has already occurred and the commitment to pay or receive payment is pending. c. A firm commitment occurs as a result of a historical relationship and there is an expected commitment to engage in a transaction in the future. d. A firm commitment is an agreement with legally enforceable termsThe following certain attributes present into a contract to determine whether the arrangements with customer are contracts within the scope of IFRS 15:I. The parties have approved the contract and are committed to perform their respective obligations.II. Each party’s rights regarding the goods or services to be transferred can be identified.III. Payment terms can be identified.IV. The contract has commercial substance.V. It is probable that the entity will collect the consideration to which it will be entitled in exchange for goods or services that will be transferred to the customer. I only I, II, and IV only All of the above I, II, IV, and V only
- Entity A obtains life insurance for its key employee from Entity B (an insurance company). Entity B cedes the insurance contract with Entity A to Entity C, another insurance company. How should Entity B account for the insurance contract with Entity C?A. using the modified version of the general model applicable for onerous insurance contractsB. using the general modelC. using a modified version of (a) or (b) applicable to reinsurance contracts heldD. using the premium allocation approachTopic: REVENUE FROM CONTRACTS WITH CUSTOMERS Requirements: a. Identify the performance obligations in the contracts. b. How should the entity recognize revenue from the contract? (State also the timing of revenue recognition for each identified performance obligation.)Question : Explain the contract practiced by the Islamic bank (partnership contract, sale based contract and supporting contract )
- Formalities in a contract can be self-imposed by the parties to a contract. Select one: True FalseIt’s a contract whereby a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. a. Contract of agency b. Contract of barter or exchange c. Contract for a piece of work d. None of the aboveWhich of the following is not a condition in identifying the contract with the customer as per IFRS 15? a- Each party's rights with regard to the goods or services concerned can be identified b- It is certain that the entity will collect the consideration to which it is entitled c- The entity and the customer have approved the contract and are committed to perform their contractual obligations d- The payment terms can be identified
- Which one of the following would not be considered in the development of a partnership agreement? A. profit and loss levels B. processing disputes C. stock options D. asset contributionsA well written partnership agreement should include each of the following except ________. A. how to settle disputes B. the name of the partnership C. division of responsibilities D. Partners individual tax rateExplain the contract liability of a partnership and the partners.