All of the Following Except Which One Are Warranted by the Transferor

question 59

Multiple Choice

All of the following except which one are warranted by the transferor of a negotiable instrument?

• A) The instrument is not subject to a defense.
• B) The transferor has no knowledge of a material alteration.
• C) All signatures are authentic and authorized.
• D) Transferor has no knowledge of insolvency proceedings instituted with respect to the maker or drawer.

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Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence over that company but does not have full control.

Bonds Payable

Long-term liabilities representing borrowed funds which the company is obligated to repay to bondholders at a specified future date.

Bond Discount

The difference between the face value of a bond and the price for which it is sold, when the bond is issued at less than its face value.

Equity Method

A method where an investment is initially recorded at cost and subsequently adjusted for the investor's proportionate share in the net assets of the investee, recognizing income or loss.