MULTIPLE CHOICE QUESTION ASSIGNMENT

Answer the following multiple choice questions. Indicate your choice by selecting only one option from the four options given for each question answered.

Use the following information to answer question 1 to 2:

Maxmor Ltd is a television manufacturing company. At the beginning of the financial year ended 28 February 20.19, Maxmor Ltd started selling all its televisions with a refund policy. If the customer is not satisfied, the television may be returned for a full refund. Sales for the year ended 28 February 20.19 amounted to R1 500 000. At year-end on 28 February 20.19 the companys directors reliably estimated that based on the current years returns and industry patterns 5% of the television sets sold will be returned for a refund

REQUIRED:

Question 1:

Which one of the following statements are correct based on the information provided above?

1.

Maxmor Ltd has only a constructive obligation to provide customers with a refund

2.

Maxmor Ltd has only a legal obligation to provide customers with a refund.

3.

Maxmor Ltd has both a legal and constructive obligation to provide customers with a refund.

4.

Maxmor Ltd has neither a legal nor a constructive obligation to provide customers with a refund