In Which of the Following Instances Would the Court Most

question 146

Multiple Choice

In which of the following instances would the court most likely hold the contract to be void on the basis of a mistake?

• A)Carson and Leno had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was that of Leno.
• B)Barry and Mary contracted for the sale and purchase of a boat for the price of $1200.When the contract was written up,the price was incorrectly stated as $1700.
• C)Although the seller said nothing to the buyer about the characteristics of the answering machine,the buyer bought it,thinking it would tell him the date and time of the call.Later,he learned that it did not perform that function.
• D)Sarah bought three rolls of wallpaper,but found she had made a mistake; two would have been sufficient.
• E)Two parties contracted for a shipload of fish,but unknown to both parties,at the time of the contract the ship had sunk and the fish had been lost.

Prepare financial statements, including owner's equity and income statements.

Perform adjustments for prepaid expenses and accrued expenses.

Record and adjust entries for notes payable and interest.

Recognize the impact of failing to record financial statement items.

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Definitions:

Government Budget Surplus

A financial situation in which a government's revenues exceed its expenditures during a specific period of time.

Real Interest Rates

Interest rates adjusted for inflation, showing the real cost of borrowing or the real yield on savings.

Real Exchange Rate

An adjusted exchange rate between two currencies that reflects the purchasing power of the two currencies; it factors in the relative prices of a standard set of goods and services in each country.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international financial transactions.