When a Person Informs You Before Performance Is Due That

question 167

True/False

When a person informs you before performance is due that he or she is not going to perform the contract, you don't have to wait to see if he or she does perform; you can make other arrangements and sue right away.

---

Definitions:

Allowance for Doubtful Accounts

An estimation of the amount of credit sales that are expected not to be collected, representing a reserve for potential bad debts.

Notes Receivable

Legally enforceable claims for money owed to a business by its customers or clients, typically evidenced by a written promise to pay.

Formal Instruments of Credit

Legal documents that acknowledge debt and specify terms of repayment, such as notes payable or bonds.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue by comparing net credit sales to the average accounts receivable.