Jose Purchases a Refrigerator on Credit with a One-Year Guarantee,but

question 21

Multiple Choice

Jose purchases a refrigerator on credit with a one-year guarantee,but it is defective and the dealer refuses to repair it.His fiancé is a surety on his promise to pay.If Jose refuses to make further payments and the dealer tries to collect from Jose's fiancé,what defense can his fiancé use for not paying the creditor?

• A)None.A surety cannot use any defenses.
• B)Inducement of the contract by fraud or duress.
• C)Lack of capacity.
• D)Breach of warranty.

---

Definitions:

Pretax Income

The income that a company earns before tax expenses are deducted, often referred to as earnings before tax (EBT).

Understatement

The act of presenting financial figures that are lower than the actual numbers, either intentionally or unintentionally.

LIFO Reserve

The difference in inventory valuation between the Last In, First Out (LIFO) method and another inventory accounting method, such as FIFO (First In, First Out).

FIFO Amounts

The value of inventory computed under the First-In, First-Out method, assuming the items purchased or manufactured first are sold first.