Fact Pattern 15-B3 (Questions B14-B15 Apply)

question 1

Multiple Choice

Fact Pattern 15-B3 (Questions B14-B15 apply)
In selling a commercial building,Birdie tells Colt that the property has a certain capacity,making it suitable for a nightclub.Birdie knows nothing about the capacity of the building,but it is not as she specifies.Colt buys the building.
-Refer to Fact Pattern 15-B3.On learning the truth,Colt confronts Birdie,who says she was not trying to fool him-she was only trying to make a sale.This is

• A)a mistake of value.
• B)a valid defense to a charge of fraud.
• C)negligent misrepresentation.
• D)unconscionable.

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Definitions:

Accounting Period

A specific duration of time used for financial reporting purposes, typically a quarter or a year.

Revenue Balances

Revenue Balances relate to the residue amounts retained from earned revenues after covering all operational expenses and costs.

Expense Balances

The remaining amounts in an organization's expense accounts after all expenditures for the accounting period have been accounted for.

Adjusted Trial Balance

A listing of all company accounts that will appear on the financial statements after year-end adjustments are made.