In Order for a Person Under Mental Incapacity to Avoid

question 43

Multiple Choice

In order for a person under mental incapacity to avoid a contract made while that person was incapacitated,the incapacitated person must show

• A)that neither party knew what was happening.
• B)that there was no intention to enter into a contract.
• C)that the contract was unfair.
• D)that the other party should have recognized the incapacity.
• E)all of the above

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Definitions:

Interest Income

Revenue earned by lending funds or through investment securities that pay interest.

Accrued Interest

Interest that has accumulated over a period but has not yet been paid or received.

Note Payable

A financial obligation represented by a written promise to pay a specified amount of money, plus interest, by a certain date or on demand.

Interest Expense

The cost incurred by an entity for borrowed funds, considered a non-operating expense on the income statement.