Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which of the following will NOT discharge the obligation to perform a contract?

Mutual agreement to rescind the contract

Breach of contract by the debtor

Novation (substituting a new contract)

Payment of the liability in full

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Verified step by step guidance

Understand the concept of 'discharge of obligation' in contract law. Discharge refers to the termination of the contractual duties, meaning the parties are no longer bound to perform under the contract.

Analyze each option provided in the question to determine whether it discharges the obligation to perform the contract. Start with 'Mutual agreement to rescind the contract.' If both parties agree to cancel the contract, the obligation is discharged.

Evaluate 'Novation (substituting a new contract).' Novation involves replacing the original contract with a new one, which discharges the obligations under the original contract.

Consider 'Payment of the liability in full.' When the debtor pays the liability in full, the obligation is discharged because the terms of the contract have been fulfilled.

Finally, examine 'Breach of contract by the debtor.' A breach does not discharge the obligation to perform the contract; instead, it may lead to legal remedies or enforcement of the contract terms. This is the option that does NOT discharge the obligation.