1. ABC Corp. has a cash flow problem and needs to borrow money to purchase inventory. Darla Green, ABC Corp.'s CEO, is a wealthy venture capitalist. Before the Bank will loan money to ABC Corp, it requires Green to sign an agreement making herself personally liable only if ABC Corp. does not repay the loan. Which if of the following is true:
A. Green is a surety and is primarily liable to the Bank.
B. Green is a guarantor and is secondarily liable only after ABC Corp. defaults.
C. Green is neither a surety nor a guarantor.
D. Green is a cosigner without consideration.
2. You are an accountant for a toy manufacturer. In a department meeting with in-house counsel, your boss wants to know the various contract options about how to ship the company's toys to buyers while minimizing costs and risks to the company. She wants to deliver the toys to a trucking company or common carrier and to avoid bearing the cost of insurance for the toys in transit if they are damaged. What type of contract would you recommend?
A. destination contract.
B. shipment contract.
C. sale on approval contract.
D. entrustment contract.