Ed Signs a Ten-Year Lease with a Survival Clause

question 55

Multiple Choice

Ed signs a ten-year lease with a survival clause. If Ed is evicted after two years, he will have to pay:

• A) rent for the remaining 8 years.
• B) damages equal to the difference between the rent specified in the lease and the rent the landlord is able to obtain from reletting the premises.
• C) until eviction.
• D) until he assigns the lease.

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Definitions:

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged, offering a more accurate financial picture.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Cash Receipts

The total amount of cash received by a business during a specified period.

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business, used to evaluate its financial health.