What Does a Continuing Guarantee Clause in a Standard Form

question 16

Multiple Choice

What does a continuing guarantee clause in a standard form bank guarantee form means?

• A)The guarantor will be liable for any future money lent by the bank to the principal debtor.
• B)The guarantor will not be liable for repayment if she gives notice to that effect to the bank.
• C)The common law rules respecting guarantees do not apply
• D)Both A and C
• E)Both B and C

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Definitions:

Job-order Costing

An accounting method that tracks costs individually for each job, rather than within set periods.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead to individual units of production based on estimated costs.

Machine Hours

The total hours that a machine or group of machines operates during a specific period, often used as a basis for allocating manufacturing overhead.

Direct Labour

Compensation for employees who engage specifically in the creation of a company's products, an essential component of production costs.