The Purpose of the Right to Disaffirm a Contract Is

question 28

Multiple Choice

The purpose of the right to disaffirm a contract is to

• A)recognize the legitimate interests of those who contract with minors.
• B)protect minors.
• C)restore persons to positions they held before contracting.
• D)ratify a contract and make it enforceable.

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Definitions:

Inventory Purchase

The acquisition of goods and materials that a company intends to sell, considered as a current asset on the balance sheet.

Perpetual Inventory Method

A method of accounting that instantly documents the sale or acquisition of inventory utilizing computerized point-of-sale systems and software for managing enterprise assets.

Gross Profit Rate

The ratio of gross profit (sales minus cost of goods sold) to net sales, showing the efficiency at which a company produces its goods.

Partial Equity Method

A variation of the equity method, where initial recognition is at cost and subsequent recognition involves recording dividends as income and not adjusting for the investee's retained earnings.