Which of the Following Occurs When Parties Agree That They

question 32

Multiple Choice

Which of the following occurs when parties agree that they simply wish to discharge each other from their mutual obligations and therefore rescind or cancel the contract?

• A) Accord and satisfaction
• B) Novation
• C) Substituted contract
• D) Mutual rescission
• E) Alteration

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Definitions:

Acquisition Method

An accounting technique used in mergers and acquisitions to consolidate the financial statements of the acquiring and acquired entities by recording assets at fair value and recognizing goodwill.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate governance.

Accounting Implications

The effects or outcomes that accounting practices and principles have on financial statements and business decisions.

Business Combination

A transaction or event in which two or more businesses come together to form one company.