Which of the following statements is accurate concerning express conditions in financial accounting?

• A. Express conditions are explicitly stated in a contract and must be strictly fulfilled before a party's performance is required.
• B. Express conditions are implied by law and do not need to be written in the contract.
• C. Express conditions can be satisfied by substantial performance rather than strict compliance.
• D. Express conditions are only relevant in informal agreements and not in formal contracts.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of express conditions in financial accounting. Express conditions are specific provisions explicitly stated in a contract that must be fulfilled before a party is obligated to perform their duties under the contract.
2. Step 2: Analyze the first statement: 'Express conditions are explicitly stated in a contract and must be strictly fulfilled before a party's performance is required.' This aligns with the definition of express conditions, as they are explicitly stated and require strict compliance.
3. Step 3: Evaluate the second statement: 'Express conditions are implied by law and do not need to be written in the contract.' This is incorrect because express conditions are explicitly stated and not implied by law.
4. Step 4: Assess the third statement: 'Express conditions can be satisfied by substantial performance rather than strict compliance.' This is incorrect because express conditions require strict compliance, not just substantial performance.
5. Step 5: Review the fourth statement: 'Express conditions are only relevant in informal agreements and not in formal contracts.' This is incorrect because express conditions are relevant in both formal and informal contracts, as long as they are explicitly stated.