Barbara and Johann Are Parties to a Contract

question 38

Multiple Choice

Barbara and Johann are parties to a contract. They agree on a novation. The novation requires

• A) ​the existence of a previous, valid obligation.
• B) ​consideration greater than $5,000.
• C) ​performance of the original contract by all of the parties.
• D) ​an accord and satisfaction.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

GAAP

Generally Accepted Accounting Principles, a common set of accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that are becoming the global standard for the preparation of public company financial statements.

Financial Statements

Documents that provide an overview of a company's financial condition, including income statement, balance sheet, and cash flow statement.