Which of the Following Is True Regarding the Warranty or Warranties

question 25

Multiple Choice

Which of the following is true regarding the warranty or warranties applicable if an instrument is not an unaccepted draft presented to a drawee?

• A) Only one warranty applies, that the warrantor of the instrument is or was entitled to payment or authorized to obtain payment.
• B) Only one warranty applies, that the instrument has not been altered.
• C) Only one warranty applies, that the warrantor has no knowledge that the drawer's signature or the draft is unauthorized.
• D) Two warranties are applicable: (1) that the instrument has not been altered, and (2) that the warrantor has no knowledge that the drawer's signature or the draft is unauthorized.
• E) Three warranties are applicable: (1) that the instrument has not been altered, (2) that the warrantor has no knowledge that the drawer's signature or the draft is unauthorized, and (3) that the warrantor of the instrument is or was entitled to payment or authorized to obtain payment.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses, leading to its net profit or loss over a specific period.

Net Operating Income

The total profit of a company after operating expenses have been subtracted from total revenue, but before deducting taxes and interest.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific product, department, or segment of a business.

Variable Expenses

Costs that change in proportion to the activities or volume of a business.