Huey Signs a Promissory Note in Reliance on Ian's Assurance

question 1

Multiple Choice

Huey signs a promissory note in reliance on Ian's assurance that it is not a note.Ian negotiates the note to Jinx Collection Agency,which is a holder in due course (HDC) of the note.When Jinx tries to collect,Huey refuses to pay.Under the HDC doctrine,the loss falls on

• A)Huey only.
• B)Huey and Jinx equally.
• C)Huey or Jinx,depending on which party can afford the loss.
• D)Jinx only.

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Definitions:

Net Method

An accounting method that records purchases after deducting any available discounts, directly showing the net purchase cost.

Credit Terms

Conditions under which credit will be extended to a customer, including repayment timeframe and interest rate.

Merchandise Inventory

Goods a company has in stock and available for sale, typically in a retail or wholesale setting.

Inventory Shrinkage

The loss of products between purchase and sale, often due to theft, damage, or errors in counting.