Sklar,CPA,purchased from Wiz Corp

question 5

Multiple Choice

Sklar,CPA,purchased from Wiz Corp.two computers.Sklar discovered material defects in the computers 10 months after taking delivery.Three years after discovering the defects,Sklar commenced an action for breach of warranty against Wiz.Wiz has raised the statute of limitations as a defense.The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months.Under the circumstances,Sklar will:

• A) win because the action was commenced within the four-year period as measured from the date of delivery.
• B) win because the action was commenced within the four-year period as measured from the time he discovered the breach or should have discovered the breach.
• C) lose because the clause providing that the statute of limitations would be limited to 18 months is enforceable.
• D) lose because the statute of limitations is three years from the date of delivery with respect to written contracts.

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Definitions:

Market Value

The current price at which an asset can be bought or sold in a public market.

Cost Method

An accounting method used to value investments where the investment is recorded at purchase cost without recognizing interim income or loss.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without control or joint control.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and the potential for dividends.