With Regard to Guarantees and Indemnities, Which of the Following

question 40

Multiple Choice

With regard to guarantees and indemnities, which of the following is false?

• A) A guarantee cannot be enforced in court unless it satisfies the writing requirements set out in statute.
• B) Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed.
• C) A guarantor can use any defence against the creditor that the debtor could use.
• D) A legally enforceable guarantee must satisfy all the elements required to create a binding contract except consideration.
• E) A legally binding promise to be primarily responsible for someone else's obligation is an indemnity.

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Definitions:

Cash Sales

Transactions where payment is made in cash at the time of sale, as opposed to credit sales where payment is deferred.

Journalize

The process of recording financial transactions in a company's journal, outlining the details of each business transaction.

Cash Short

A situation where the actual amount of cash on hand is less than the expected amount, often indicating errors or theft.

Cash Over

Refers to a situation where the actual cash amount received is greater than the expected or recorded amount.