Which of the Following Is Needed in Order for the Implied

question 82

Multiple Choice

Which of the following is needed in order for the implied warranty of merchantability to be applied?

• A) Both parties must be merchants and a sale must be involved.
• B) Both parties must be merchants, and either a sale or lease may be involved.
• C) The seller must be a merchant and a sale must be involved.
• D) A seller or lessor must be a merchant, and either a sale or lease may be involved.
• E) The seller must be a merchant, goods valued at over $500 must be involved, and either a sale or lease may be involved.

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Definitions:

Trial Balance

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the balance of a company's accounting system.

Prepaid Insurance

An expense paid in advance for insurance coverage, recorded as a current asset on the balance sheet until the coverage period elapses.

Posting Reference

A code or number used in ledger accounts that links journal entries to the specific accounts affected, facilitating traceability and audit processes.

Journal

A journal in accounting refers to a detailed record of all the financial transactions of a business, showing the debits and credits for each transaction.