Which of the Following Statements Most Accurately Defines the Role

question 12

Multiple Choice

Which of the following statements most accurately defines the role of equity and trusts in the modern day?

• A) Equity is a body of law and rules which has made many historical contributions to the law, but is no longer vital or important.
• B) The trust is the only contemporary doctrine of equity of any relevance; the rest of equitable rules and principles are of historical interest only.
• C) Equity is a vital and important system of law that recognises rights and benefits that the common law did not, and which operates alongside the common law in the modern legal system - the trust is the prime example of such rights.
• D) Equity is nothing more than a sub-set of rules of common law which deal with fairness and the trust is example of these rules in practice.

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Definitions:

Balance Sheet

The balance sheet is a financial statement that shows a company's financial position at a specific point in time, listing assets, liabilities, and shareholders' equity.

Allowance Method

Bases bad debt expense on an estimate of uncollectible accounts.

Bad Debt Expense

An expense reported on the income statement, representing the value of accounts receivable deemed non-collectible.

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.