Intoxicated and Not Aware of the Consequences,Umberto Agrees to a Two-Year

question 21

Multiple Choice

Intoxicated and not aware of the consequences,Umberto agrees to a two-year cell-phone service contract with Wander Talk,Inc.,at more than the average market price. This contract is

• A)enforceable.
• B)notenforceable because contracting parties can change their minds.
• C)notenforceable because the contract clearly favors Wander Talk.
• D)notenforceable because Umberto was intoxicated enough to lack mental capacity when he agreed to it.

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Definitions:

Partnership Books

Financial records and accounts specifically maintained to track the transactions and financial state of a partnership.

Capital Account

A financial statement that shows the changes in a company's equity during a specific period.

Capital Balance

The amount of owner's equity or shareholder's equity in a business, representing the owner's investment.

Net Assets

The total assets minus total liabilities of an entity, representing the owners' equity.