Which of the Following Is True Regarding a Transferor's Liability

question 38

Multiple Choice

Which of the following is true regarding a transferor's liability on a transfer warranty?

• A)The warranties apply only when the transfer was accompanied by the transferor's indorsement.
• B)The transferor is liable only after presentment to the drawee or a primarily liable party,followed by that party's dishonor.
• C)It applies even when there was no consideration for the transfer.
• D)If the transfer was by indorsement,the warranty extends to all subsequent transferees,and not just the immediate transferee.

---

Definitions:

Maturity Value

The total amount payable to an investment's holder at the investment's maturity date, including the principal and any interest earned.

Maker

In financial terms, the maker is typically the person who creates or signs a promissory note, thereby agreeing to pay the note’s value at maturity.

Notes Receivable

Represents claims against others, recorded by promissory notes, for money to be paid to the company.

Journal Entry

The recordation of a financial transaction in an accounting system, showing the accounts and amounts debited and credited.