Which of the Following Is True If a Debtor Engaged

question 80

Multiple Choice

Which of the following is true if a debtor engaged in fraud in order to convince a surety or guarantor to enter into a contract with a third party?

• A)The surety is released from liability,but the guarantor is not.
• B)Because the third party is innocent,neither the surety nor the guarantor is released from liability.
• C)Both the guarantor and the surety will likely be released from liability on interest due on the contract,but not for the principle amount.
• D)The guarantor is released from liability,but the surety is not.
• E)Both the guarantor and the surety will likely be released from liability.

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Definitions:

Traditional Costing Systems

A method of accounting that allocates overhead costs based on a predetermined rate, often not capturing the actual costs of production accurately.

Manufacturing Costs

The expenses involved in the production of goods, including labor, raw materials, and overhead.

Batch-Level Activities

Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch.

Unit-Level Activities

Tasks or processes that vary directly with the number of units produced or services provided.