Elle, a Minor Acting on Her Own, Signs a Contract

question 19

Multiple Choice

Elle, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Elle disaffirms the deal. She

• A) can keep the horse and the tack.
• B) can keep the horse but not the tack.
• C) can keep the tack but not the horse.
• D) must return both the horse and the tack.

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Definitions:

Ownership Interest

The proportion of shares or rights in a company held by an investor, indicating the level of control and financial stake.

Equity Method

A financial accounting approach for recording investments, reflecting changes in the investment value based on the investor’s proportionate share in the investee’s net income or loss.

Voting Shares

Shares that grant the shareholder the right to vote on company matters, such as electing the board of directors.

Sale

The exchange of a commodity or service for payment, constituting a basic economic transaction.