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    PracticeCPA®CPA REG Practice Exam 2Question 30
    Hard1 markMultiple Choice
    Area II: Business LawREGBusiness LawContracts

    CPA · Question 30 · Area II: Business Law

    Under the Statute of Frauds, which of the following contracts must be in writing to be enforceable?

    Answer options:

    A.

    A contract to perform services for $600.

    B.

    A contract for the sale of goods for $400.

    C.

    A contract to act as a surety for another's debt.

    D.

    A contract that can be performed within 6 months.

    How to approach this question

    Recall MY LEGS (Marriage, Year, Land, Executor, Goods >$500, Surety).

    Full Answer

    C.A contract to act as a surety for another's debt.✓ Correct
    The Statute of Frauds requires certain contracts to be in writing: (1) Marriage, (2) Year (cannot be performed within 1 year), (3) Land, (4) Executor, (5) Goods >= $500, (6) Surety. Option C is a suretyship contract. Option A is services (no $ limit, only time limit). Option B is goods under $500.

    Common mistakes

    Thinking the $500 limit applies to services (it applies to goods only).
    Question 29All questionsQuestion 31

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