Which of the Following Statements Is the Best Description of a 'Voidable

question 34

Multiple Choice

Which of the following statements is the best description of a 'voidable' contract?

• A)The contract remains valid and binding unless and until it is repudiated by the injured party.
• B)There are no legal rights or obligations from the outset,and the contract cannot be enforced by either party.
• C)While the contract is valid on its face,no legal action can be brought on it.
• D)The purpose of the contract contravenes a statute or the common law.

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Definitions:

Owner Withdrawals

Money or assets taken out of a business by the owner(s) for personal use.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest of shareholders or owners.

Adjusted Trial Balance

A list of all the accounts of a company, showing the balance of each after adjustments have been made for errors, omissions, or accruals.

Current Assets

Assets that are expected to be converted into cash, sold or used up within one year or within the entity's operating cycle, whichever is longer.