Martin Agrees to Perform an Audit Within 30 Days, Knowing

question 63

True/False

Martin agrees to perform an audit within 30 days, knowing that time is of the essence. After the 30 days, Martin has only performed 60% of the audit. Martin has materially breached his contract.

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Definitions:

Net Working Capital

The contrast between a firm's assets available in the short term and the liabilities due in the same period, pointing to its immediate financial condition.

Accounts Payable

Liabilities of a business that are due to be paid to creditors within a short period, usually one year.

Balance Sheet

A financial statement that shows the assets, liabilities, and shareholders' equity of a company at a specific point in time, providing a snapshot of its financial condition.

External Financing Needed

The additional funding required by a firm to finance its business activities and growth outside of internal cash flows.