Which of the Following Would Always Be Considered to Be

question 6

Multiple Choice

Which of the following would always be considered to be contrary to public policy?

• A) A contract which contains a covenant not to compete.
• B) A contract offered on a take-it-or-leave-it basis.
• C) An agreement to pay someone to make false statements about a competitor's product.
• D) An agreement which contains an exculpatory clause.

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Definitions:

Prepaid Rent

An asset account that represents payment for rent that covers a future period, reflecting rent expense that has not yet been incurred.

Adjusting Entry

A journal entry made at the end of an accounting period to record unrecognized income or expenses in order to maintain accrual accounting accuracy.

Rent Expense

The cost incurred for using a property or space for business or residential purposes.

Contra Asset Account

An account that offsets or reduces the balance of a related asset account, used to record reductions or allowances, like accumulated depreciation.