Merchant Supply Company and National Discount Stores Enter into a Contract

question 52

Multiple Choice

Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers. Merchant assures National that it has valid title to the goods. Under the UCC, a warranty of title arises

• A) automatically in most lease contracts.
• B) only if the lessee asks for such a warranty.
• C) only if the lessor expresses such a warranty.
• D) only in conjunction with sales contracts, not lease contracts.

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Definitions:

Financing

The means by which companies or governments raise funds for their activities, by issuing debt, equity, or other financial instruments.

Net Income

A company's profit margin following the removal of all operational costs and taxes from its revenue.

Total Stockholders' Equity

The total amount of funds contributed by shareholders and retained earnings within a company.

Total Liabilities

The total of all financial obligations owed by a business to creditors, including loans, accounts payable, and other debts.