Which of the Following Is True Regarding Simple Contracts as Compared

question 4

Multiple Choice

Which of the following is true regarding simple contracts as compared to negotiable instruments?

• A)Simple contracts may be assigned to an assignee or negotiated to a holder while negotiable instruments may only be negotiated to a holder in due course.
• B)Simple contracts may be assigned to a holder while negotiable instruments may not be assigned or negotiated.
• C)Simple contracts may be assigned to an assignee or negotiated to a holder while negotiable instruments may only be negotiated to a holder.
• D)Simple contracts may not be assigned while negotiable instruments may be negotiated to holder.
• E)Simple contracts are assigned to an assignee,while negotiable instruments are negotiated to a holder.

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Definitions:

Fair Value

The amount one would earn from disposing of an asset or spend in delegating a liability in a seamless trade among market actors on the appointed valuation day.

AASB 9

An Australian Accounting Standard Board regulation that outlines the requirements for the classification, measurement, and impairment of financial instruments.

Financial Liabilities

Obligations that require a company to pay money or deliver financial assets to another entity in the future.

Financial Guarantees Contracts

Contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.