GAAP Considers Debt Extinguished If One of the Following Occurs

question 36

True/False

GAAP considers debt extinguished if one of the following occurs:
* the creditor has been paid in full and has released the company from any further obligations.
* the debtor is legally released from being the primary responsible party to the debt.

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Definitions:

Continuing Business

An ongoing enterprise that maintains its operations over time, adapting to changes as necessary to remain viable.

Consent

Agreement or permission for something to happen, given by someone with full understanding of what is involved.

Modified

Changed or adjusted from the original form, purpose, or condition.

Third Party

An entity or individual that is involved indirectly or is outside the main two parties engaged in a transaction or legal matter.