A Voidable Contract Is a Contract That

question 64

Multiple Choice

A voidable contract is a contract that,

• A)like a void contract,never exists so as to give rise to rights under it.
• B)unlike a void contract,cannot be rectified.
• C)unlike a void contract,exists but does not give rise to legal rights.
• D)unlike a void contract,exists but can only be set aside by agreement of the parties to it.
• E)unlike a void contract,exists but can be set aside at the option of one of the parties to it.

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Definitions:

Prepaid Expense

Prepaid expense refers to payments made in advance for goods or services to be received in the future, recognized as assets on a balance sheet.

Unearned Service Revenue

Income received in advance for services that have not yet been performed, considered a liability until the service is delivered.

Adjusting Entries

Adjustments in accounting records at the end of a period to correctly distribute incomes and costs to the period they pertain to.

Prepaid Rent

Payments made in advance for rent, recorded as an asset on the balance sheet until it is consumed over time and moved to expense.