Sean has a six-year-old car that he bought two years ago directly from its original owner. Eight
months ago he received a recall notice about a safety problem with the brakes. He never
responded to the notice.
Yesterday Sean was driving when the brakes failed and caused him to
strike and injure a pedestrian. Which of the following is true in lawsuits against the car's
manufacturer?
A) The pedestrian cannot recover because the correction of a defect defense will apply even
though Sean did not take the car in for the repair.
B) Sean can recover despite having received the recall notice.
C) The pedestrian could not recover due to assumption of the risk.
D) The pedestrian cannot recover due to the fact that the pedestrian was not using the car.
A
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The accountant of Delta, Inc. failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned. Assume the deferred revenue was initially recorded as a liability. Which of the following statements is true?
A) The total revenue will be overstated. B) The total revenue will be understated. C) The total expenses will be overstated. D) The total expenses will be understated.
The sale price of a property is $100,000. The buyer pays $10,000 down and makes one payment of $268 on the existing loan balance of $50,000, bearing interest at 5%. The buyer then makes a second (monthly) payment of $253 to the seller on $40,000 owner-carried financing, bearing interest at 6.5%. What type of land contract is this an example of?
a. Straight b. Wrap-around c. Power of sale d. All of the above