Which of the Following Statements Is True About Unliquidated Debts

question 5

Multiple Choice

Which of the following statements is true about unliquidated debts?

• A)The amount being due and certain,a promise to pay less lacks consideration.
• B)Some courts allow collection of the remainder if checks marked "payment in full" are cashed without reservation.
• C)Since the amount is genuinely in dispute,an agreement resulting in accord and satisfaction is enforceable.
• D)Composition agreements are an exception to unliquidated debts and can be enforced without additional consideration.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, which is recognized in the financial statements as an expense.

Times Interest Earned Ratio

A financial metric that measures a company's ability to cover its interest expenses with its earnings before interest and taxes.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that is financed by stockholders' equity.