Which of the Following Statements Is True Regarding a Guarantor

question 57

Multiple Choice

Which of the following statements is true regarding a guarantor?

• A)In order to be a guarantor,a person must enter into a deed of trust with the principal debtor.
• B)A guarantor is primarily liable for the debt along with the principal debtor.
• C)Generally,a guarantor's promise must be made in writing to be enforceable under the statute of frauds.
• D)A guarantor joins the principal debtor in making a promise.

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Definitions:

Work in Process Inventory

Work in process inventory consists of partially finished goods that are still in the production process at a given point in time.

Overapplied Overhead

A situation where the overhead allocated to products or services exceeds the actual overhead costs incurred.

Cost Accounting System

A method of accounting for the collection, recording, classification, analysis, and allocation of direct costs, indirect costs, and overheads to cost units and cost centres for budgeting, controlling, and decision making.

General Accounting System

The underlying system and processes used to record, classify, and report on financial transactions and conditions, ensuring accuracy and compliance with regulations.