Which of the Following Is True

question 6

Multiple Choice

Which of the following is true?

• A)Where a portion of a contract is void,the whole contract is affected and a court will set aside the whole contract as being void.
• B)A contract that contemplates the commission of a tort is not legal unless the tort is committed and someone is injured.
• C)Where a portion of a contract is void,the remainder of the contract is not affected provided a court can sever the void parts without doing injustice to the parties.
• D)The common law supersedes statute law when determining the legality of contracts.
• E)A statute can only make a contract illegal;it cannot make a contract void.

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Definitions:

Estimated Net Realizable Value

The estimated selling price of goods minus the costs of their completion and the costs required to make the sale.

Bad Debt Expense

Reflects the cost of accounts receivable that a company no longer believes it will collect, indicating the expected uncollectable amounts.

Sales Discount

Cash discount offered to encourage prompt payment of an account receivable.

Account Receivable

Debts owed by clients to a firm for delivered goods or services awaiting payment.