Is Ryan Correct That the Car Was Sold with an Implied

question 68

Multiple Choice

Is Ryan correct that the car was sold with an implied warranty of fitness for a particular purpose?

• A) Yes, because it was promised that the car would pull the boat.
• B) No, because Kristin was only engaged in puffing.
• C) No, because only the manager can make such a warranty.
• D) No, because Kristin made only a warranty of merchantability, not a warranty of fitness for a particular purpose.
• E) No, because no implications were made.

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Definitions:

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Profit Or Loss Model

A financial model that calculates the difference between a company’s revenues and its expenses, helping understand its profitability over a certain period.

Unrealized Gains

Increases in the value of assets that have not yet been sold, and therefore, the gains have not been realized or reflected in the income statement.

Common Shares

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.