Which of the Following Must a Mutual Mistake Involve in Order

question 25

Multiple Choice

Which of the following must a mutual mistake involve in order for a mutual mistake to interfere with legal consent?

• A) A basic assumption about the subject matter of the contract.
• B) A material effect on the agreement.
• C) A basic assumption about the subject matter of the contract and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, but not a material effect on the agreement.
• D) A basic assumption about the subject matter of the contract, an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, and a material effect on the agreement.
• E) An admission by one of the parties that a misrepresentation occurred.

Apply the concepts of discounting and interest calculation to various financial scenarios.

Convert monthly interest rates to annual rates.

Understand and apply credit terms and conditions, including finance charges and payment schedules.

Convert annual interest rates to monthly rates.

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Definitions:

Insurance Policy

A contract between an insurer and a policyholder specifying the claims which the insurer is legally required to pay in exchange for an upfront premium.

Adjusting Entry

A journal entry made at the end of an accounting period to record unrecognized income or expenses, ensuring the financial statements are accurate.

Purchased

Refers to items or assets acquired by a company through the exchange of money or its equivalents.

Unearned Fees

Income received by a company for goods or services yet to be provided or delivered, recorded as a liability on the balance sheet until earned.