Ralph Sold a Motel to Steve by Stating That He

question 32

Multiple Choice

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000.In reality he paid $100,000 for the motel and has earned a net average annual profit of only $28,000.Steve made no attempt to verify the statements until after the transaction was completed.In this case:

• A)Ralph has committed fraudulent misrepresentation.
• B)Steve is bound by the contract, because he failed to verify the statements which were made to him.
• C)the contract is voidable at Steve's option.
• D)Two of the above, (a) and (c).

Recognize the importance of convenient store locations and the concept of "location, location, location" in retail success.

Understand the value creation through personalized offerings and customer service improvements.

Appreciate the significance of providing a seamless customer experience across different shopping channels.

Understand the target customers and value propositions of extreme-value and convenience retailers.

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Definitions:

Adjusting Entries

Journal records created during the final part of an accounting period for the purpose of attributing revenues and expenses to the timeframe in which they actually took place.

Correct Balances

Accurate financial figures in accounting records that match the real-world values of assets, liabilities, and equity.

Accounting Period

A specific time frame for which financial records are tracked and reported, typically a year or quarter.

Accrual Basis

An accounting method where revenue is recorded when earned and expenses are recorded when incurred, regardless of when cash transactions occur.