Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Business Organization

Financial Accounting

1. Introduction to Accounting

Business Organization

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Multiple Choice

Which statement is true about the ability of minors to enter into contracts?

Minors cannot enter into any contracts under any circumstances.

Minors are legally bound by all contracts they sign, just like adults.

Contracts with minors are always considered valid and enforceable by the other party.

Contracts entered into by minors are generally voidable at the option of the minor.

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Verified step by step guidance

Understand the concept of 'voidable contracts': A voidable contract is a valid contract that can be legally voided at the discretion of one of the parties. In this case, minors have the legal right to void a contract they enter into.

Recognize the legal principle: Minors are generally considered to lack the legal capacity to enter into binding contracts. This is to protect them from exploitation or making decisions they may not fully understand.

Identify exceptions: While most contracts entered into by minors are voidable, there are exceptions. For example, contracts for necessities (such as food, clothing, and shelter) are typically enforceable to ensure minors can access essential goods and services.

Apply the principle to the options: Evaluate each statement in the problem. The first statement is incorrect because minors can enter into contracts under certain circumstances. The second statement is incorrect because minors are not legally bound by all contracts. The third statement is incorrect because contracts with minors are not always valid and enforceable. The fourth statement aligns with the legal principle that contracts with minors are generally voidable at their option.

Conclude the correct answer: Based on the analysis, the correct statement is that contracts entered into by minors are generally voidable at the option of the minor.