Brian Makes a Material Misrepresentation of Fact Regarding His Horse

question 61

Multiple Choice

Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day.Later that day, Rosalind makes an offer to buy the horse which Brian accepts, without correcting his earlier misrepresentation of fact.

• A)Brian may avoid the contract.
• B)Rosalind may avoid the contract.
• C)Either or both Brian or Rosalind may avoid the contract.
• D)Neither Brian nor Rosalind may avoid the contract.

---

Definitions:

Accounting Equation

The fundamental formula in accounting that represents the relationship between an entity's assets, liabilities, and equity (Assets = Liabilities + Equity).

Liabilities

Financial obligations or debts that a company owes to others, payable in money, goods, or services.

Owner's Equity

Represents the owner’s claims on the assets of a business, calculated as the business’s total assets minus its total liabilities.

Accounting Equation

The fundamental equation of double-entry bookkeeping, reflecting that assets equal liabilities plus owner's equity.