Fact Pattern 11-1

question 41

Multiple Choice

Fact Pattern 11-1
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.

-Refer to Fact Pattern 11-1. The next day, Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sally and Tasty

• A) may agree to a new contract, but it cannot include a new price.
• B) may agree to a new contract that includes the new price.
• C) must perform their original contract.
• D) must perform the part of their original contract that is executory.

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Definitions:

Balance Sheet

A report detailing a company's financial status at a particular moment, highlighting its assets, liabilities, and owners' equity.

Interim Financial Statements

Financial reports covering a period shorter than a fiscal year, often quarterly, used to give an update on a company's financial health.

Overapplied Factory Overhead

The amount of factory overhead applied in excess of the actual factory overhead costs incurred for production during a period.

Balance Sheet

An account that outlines the assets, liabilities, and equity of shareholders of a company on a particular date.