Chasya Rented a Widget from Alec

question 46

Multiple Choice

Chasya rented a widget from Alec.During the rental period, the widget was involved in an accident.Which of the following statements is TRUE?

• A)The parties' rights with respect to the accident are probably governed by the Sale of Goods Act.
• B)Since the transaction was not intended to transfer title, Alec could not have been required to warn Chasya with respect to the use of the widget.
• C)If the widget was damaged during the accident, Chasya necessarily will be treated as an insurer.
• D)If the accident was caused by the fact that the widget was defective, Chasya may be entitled to recover damages for personal injuries that she suffered during the accident, but only if Alec actually knew of the defect before providing Chasya with possession of the widget.
• E)If Alec sues for the damage done to the widget, the court may shift the burden of proof by requiring Chaysa to prove that the damage was not her fault.

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Definitions:

Additional Paid-In Capital

The amount of money that shareholders have paid in excess of the par value of the shares, representing a source of non-debt based capital for the company.

Goodwill

A non-physical asset created when acquiring a business at a cost higher than the fair value of its identifiable net assets.

Equity Method

An accounting technique used by companies to assess earnings generated by their investments in other companies, incorporating these earnings as part of their income.