In a Guaranty Arrangement,the Guarantor

question 159

Multiple Choice

In a guaranty arrangement,the guarantor:

• A) promises to pay the debt of another in any circumstance.
• B) promises to pay the debt of another if that other person does not pay.
• C) promises to pay the debt of another contingent upon the happening of an external event.
• D) promises to assume responsibility for the quality of goods.
• E) promises to collect a debt or debts on behalf of a creditor.

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Definitions:

LIFO

In the Last In, First Out method, the newest items in the inventory are the first to be sold.

Inventory Turnover

A financial ratio that measures the number of times a company sells and replaces its stock of goods during a given period, indicating efficiency in inventory management.

LIFO Reserve

The difference between the cost of inventory calculated under the Last-In, First-Out (LIFO) method and its cost calculated under the First-In, First-Out (FIFO) method.

Historical Cost

The original monetary value of an asset or investment at the time of its purchase, disregarding inflation over time.