Delaney's Department Store Had Been Trying for Three Years to Collect

question 27

Multiple Choice

Delaney's Department Store had been trying for three years to collect $100 owed it by a customer.Finally the customer said, "Look, I'm broke.I can give you $50 right now and I'll wash the windows on the front of your store if you'll forget about the rest of it." Delaney's accountant, thinking that they would never see any money at all if they didn't accept this offer agreed to it.This is an example of

• A) an express warranty.
• B) disaffirmance of a contract.
• C) innocent misrepresentation.
• D) an accord and satisfaction.

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Definitions:

Consecutive Payments

Regular payments made in a series one after another, often referring to loan repayments or lease payments.

Accrued Liability

A liability that has been incurred, often for expenses, that has not yet been paid or recorded at the end of the accounting period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business.