Which of the Following Is True of Warranty Liability as It

question 58

Multiple Choice

Which of the following is true of warranty liability as it affects negotiable instruments?

• A)Warranty liability applies to any persons who transfer an instrument and receive consideration.
• B)A drawee of an unaccepted draft who pays in good faith receives a presentment warranty from the person obtaining payment and from all prior transferors of the draft.
• C)A drawee who accepts an instrument in good faith receives a presentment warranty from the person obtaining acceptance that the draft has not been altered.
• D)All of the above.
• E)None of the above.

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Definitions:

Liability Account

An accounting record tracking obligations or debts that a company owes to others.

Credit Balance

Credit Balance refers to the amount of money that a company or individual has in their account that can credit against future purchases or borrowings.

Payee

The party in a financial transaction to whom money is paid or is to be paid.

Interest Income

Earnings received from deposit accounts or investments that yield interest, such as savings accounts, bonds, or loans.