When Both Parties Agree That Their Contractual Relationship Should Be

question 166

Multiple Choice

When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is:

• A) rescission
• B) novation
• C) accord and satisfaction
• D) discharge by operation of law
• E) equitable remedy

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Definitions:

Excess Fair Value

The amount by which the fair value of an asset exceeds its carrying value on the balance sheet, often recognized during business combinations.

Franchise Contract

A legal agreement granting a franchisee the rights to operate a business under the franchisor's brand and operational model in exchange for fees or royalties.

Noncontrolling Interest

Noncontrolling interest is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent company, which is reported in the consolidated financial statements of the parent company.

Accrual-based Net Income

A measure of an entity's financial performance that includes both cash and non-cash transactions during a reporting period.