A and B Entered into a Contract for the Purchase

question 147

Multiple Choice

A and B entered into a contract for the purchase and sale of three grams of cocaine. B delivered the goods, but A didn't pay. If B sued for payment, the court would not enforce the contract because of which of the following?

• A) Mistake
• B) Illegality of object
• C) Rescission
• D) Non est factum
• E) Rectification

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Definitions:

Equity Method

The equity method is an accounting technique used for recording investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investing company’s share of the investee’s profits or losses.

Carrying Value

The original cost of an asset, less any accumulated depreciation, amortization, or impairment costs, representing its value on the balance sheet.

Investment Account

A financial account held at a financial institution that contains securities, cash, and other assets, typically used for investing purposes.

Equity Method

An accounting technique used when a company holds a significant but not controlling investment in another company, recognizing its share of the investee's profits and losses.