Fact Pattern 12-A3

question 10

Multiple Choice

Fact Pattern 12-A3
Cut-Rate Construction Company begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay.
-Refer to Fact Pattern 12-A3. If CCC offers, as a reason for the extra $100,000, that extraordinary unforeseen difficulties will add consid?erable cost to the project, the agreement is

• A) enforceable as an accord and satisfaction.
• B) enforceable because of unforeseen difficulties.
• C) unenforceable as an illusory promise.
• D) unenforceable due to the preexisting duty rule.

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Definitions:

Permanent

Describes assets or records that are intended to be held or used on a long-term basis and not expected to be sold or otherwise converted into cash within a year.

General Journal

A journal used to record all types of accounting transactions with detailed explanations.

Permanent

Refers to accounts that represent the financial standing of a company and carry their ending balances over from one accounting period to the next, such as assets, liabilities, and equity accounts.