Which of the Following Best Describes the Warranty of Title

question 2

Multiple Choice

Which of the following best describes the warranty of title in connection with a leasing transaction?

• A) Because ownership does not transfer,there is no warranty of title nor is there any similar warranty.
• B) For lessees,the warranty of no infringements takes the place of the warranty of title.
• C) For lessees,the warranty of title is replaced by a warranty against interference.
• D) In a leasing transaction,the ownership status of the leased property is not of concern to the lessee,thus there is no warranty of title.

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Definitions:

Gross Price

The total cost of a good or service without deducting any discounts, taxes, or other expenses.

Net Price

The actual price paid for a product after deducting any discounts, rebates, or allowances from the list or gross price.

Allowance Method

An accounting technique that estimates and records bad debts expense from credit sales based on anticipated losses.

Sales Discounts

Reductions in the price of goods or services offered to customers, usually as an incentive to encourage prompt payment.