Which of the Following Is True Regarding the Ability of Persons

question 22

Multiple Choice

Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract?

• A)Persons suffering from a mental illness never have capacity to enter into a binding contract.
• B)Persons suffering from a mental illness have full capacity to enter into a binding contract,so long as they do not present a danger to themselves or others.
• C)Persons suffering from a mental illness have full capacity to enter into a binding contract,so long as they inform the other party that they are either in,or in the process of seeking,professional treatment.
• D)Persons suffering from a mental illness may have full,limited,or no legal capacity to enter into a binding contract,depending on the nature and extent of their mental deficiency.
• E)Persons who suffer from a mental illness always have full capacity to enter into a binding contract.

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Definitions:

Pretax Income

The income a company generates before income taxes are deducted, also known as earnings before tax (EBT).

Variable Costing

An accounting method that only allocates variable costs to production, treating fixed costs as period costs that are charged to expense as they are incurred.

Fixed Overhead Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, and must be paid regardless of the business activity level.

Product Costs

Costs that are directly associated with the production of goods or services.