In a mixing bowl, combine dry ingredients. Using a spoon make 3 wells in the dry ingredients. Pour oil into one, vinegar into the other and vanilla into the third. Slowly pour water over all . Mix on low speed till thoroughly mixed (batter will be thin).
Pour into a greased and floured 8 inch square (or 9 inch round) baking dish. Bake at 375* for 30-35 minutes. or till a toothpick comes out clean. Cool. Dust with confectioners sugar.