CA Foundation Exam > CA Foundation Questions > A continuing guarantee applies to:a)a specifi...
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A continuing guarantee applies to:
- a)a specific transaction
- b)a specific number of transactions
- c)all transactions of specific transaction series
- d)reasonable number of transactions.
Correct answer is option 'C'. Can you explain this answer?
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A continuing guarantee applies to:a)a specific transactionb)a specific...
Continuing Guarantee
- Definition: A continuing guarantee is a type of guarantee that applies to all transactions of a specific transaction series.
- Scope: It covers a series of transactions rather than just a single transaction.
- Duration: The guarantee remains in effect until it is revoked or the specified transaction series comes to an end.
- Responsibility: The guarantor is liable for all transactions within the specified series, even if they occur over an extended period of time.
- Legal Implications: It is important for both the guarantor and the beneficiary to clearly understand the scope and duration of a continuing guarantee to avoid any misunderstandings in the future.
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A continuing guarantee applies to:a)a specific transactionb)a specific...
Understanding Continuing Guarantee
A continuing guarantee is a crucial concept in financial agreements, particularly in the context of credit and loans. It pertains to the obligations of a guarantor to cover a borrower’s debts over a series of transactions rather than just one.
What is a Continuing Guarantee?
- A continuing guarantee is a legal commitment by a guarantor to cover multiple transactions or obligations of the debtor.
- It remains in effect until it is revoked or the obligation is fulfilled.
Why Option C is Correct?
- Option C states that a continuing guarantee applies to "all transactions of a specific transaction series."
Key Points:
- The guarantee is not limited to a single transaction; it encompasses multiple related transactions.
- This type of guarantee is particularly helpful in business scenarios where a lender may extend credit over time, such as ongoing supply agreements or lines of credit.
Implications of a Continuing Guarantee
- The guarantor is liable for all debts incurred under the defined series of transactions, providing greater flexibility to the debtor.
- It simplifies the process for lenders, as they do not need to secure new guarantees for each individual transaction.
Conclusion
In summary, a continuing guarantee is essential for facilitating ongoing financial relationships. It is designed to cover a series of related transactions, making it a versatile tool for both lenders and borrowers, thereby confirming why option C is the correct answer.
A continuing guarantee is a crucial concept in financial agreements, particularly in the context of credit and loans. It pertains to the obligations of a guarantor to cover a borrower’s debts over a series of transactions rather than just one.
What is a Continuing Guarantee?
- A continuing guarantee is a legal commitment by a guarantor to cover multiple transactions or obligations of the debtor.
- It remains in effect until it is revoked or the obligation is fulfilled.
Why Option C is Correct?
- Option C states that a continuing guarantee applies to "all transactions of a specific transaction series."
Key Points:
- The guarantee is not limited to a single transaction; it encompasses multiple related transactions.
- This type of guarantee is particularly helpful in business scenarios where a lender may extend credit over time, such as ongoing supply agreements or lines of credit.
Implications of a Continuing Guarantee
- The guarantor is liable for all debts incurred under the defined series of transactions, providing greater flexibility to the debtor.
- It simplifies the process for lenders, as they do not need to secure new guarantees for each individual transaction.
Conclusion
In summary, a continuing guarantee is essential for facilitating ongoing financial relationships. It is designed to cover a series of related transactions, making it a versatile tool for both lenders and borrowers, thereby confirming why option C is the correct answer.
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A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer?
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A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer?.
A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A continuing guarantee applies to:a)a specific transactionb)a specific number of transactionsc)all transactions of specific transaction seriesd)reasonable number of transactions.Correct answer is option 'C'. Can you explain this answer?.
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