Which of the Following Would Be the Result in a Majority

question 42

Multiple Choice

Which of the following would be the result in a majority of states in regard to Penny's obligation to the dive shop?

• A) That because the debt was unliquidated and the dive shop cashed the check, an accord and satisfaction occurred, and Penny owes nothing.
• B) That because the debt was liquidated, no accord and satisfaction occurred, and Penny owes the full $2,000.
• C) That in order to satisfy equitable principles, the parties would split the remaining debt with Penny owing $1,000.
• D) That under the UCC, Penny would be required to pay the full amount, but the dive shop would be estopped from charging any interest.
• E) That because the dive shop offered, through issuance of the check, full repayment, no accord and satisfaction existed; Penny owes the full $2,000.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and losses.

Cash Receipts

Inflows of cash, often from sales, interest, or dividends.

Supplies Expense

Costs incurred for items used in the operation of a business, not directly tied to the production of goods or services.

Journalize

The process of recording transactions in the journal, a step in the accounting cycle that precedes posting to ledgers.