Which of the Following Statements Is Correct with Respect to a Contract

question 51

Multiple Choice

Which of the following statements is correct with respect to a contract for the purchase of goods?

• A) Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
• B) Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement.
• C) Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
• D) The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective.
• E) The purchaser has a claim against the manufacturer only if the goods purchased are defective.

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Definitions:

Internal Reporting

The process of preparing and presenting financial statements and other reports to management within an organization.

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting in the U.S.

Acquisition Method

An accounting technique used in consolidating the financial statements of a group in which one controls one or more others, focusing on fair value of the acquired assets and liabilities.