Albert,a Supplier of Goods,owes George $2000

question 9

Multiple Choice

Albert,a supplier of goods,owes George $2000.00.Albert gives George a note for $2000.00 payable in 60 days.A couple of weeks later,George buys $800.00 worth of goods from Albert.If George has not paid Albert the $800.00 by the time the 60 days has expired and Albert claims payment of the $2000.00 note

• A)Albert need not honour the note until George has paid him the $800.00.
• B)Albert must honour the note and pay the $2000.00.
• C)Albert can deduct,or set-off,the $800.00 owed by George against the $2000.00 that he owes and pay George $1200.00.
• D)Albert need not honour the $2000.00 note until a reasonable time after the 60 days expires.
• E)none of the above

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Assets

Resources owned by a person or company that have economic value or can provide future benefits, such as cash, property, or investments.

Equipment

Tools, machinery, or other necessary items for a particular purpose or activity.

Stockholders' Equity

The ownership interest of shareholders in a corporation, represented by the company's assets minus its liabilities.