Sage Smith Works as a Laser Technician for a Local

question 14

Multiple Choice

Sage Smith works as a laser technician for a local dermatology center consisting of physicians operating under a partnership agreement.Sage purchased supplies through the mail from a medical supply facility totaling $5,000,signing the contract agreeing to pay for the supplies under the name,Sage Smith.A few weeks later the dermatologists became embroiled in a bitter dispute regarding profits and terminated the partnership.Unfortunately,the partners were not aware of the debt owed to the medical supply facility; and the bill remained unpaid.Sage received a bill from the supply company for $5,000.Is Sage liable to the medical supply company,and why or why not?

• A) No,because Sage was only employed as a technician.
• B) No,because the medical supply facility should have asked for proper identification.
• C) Yes,because the contract was signed in Sage's name.
• D) Yes,but only because the partnership terminated.

---

Definitions:

Debtor

An individual or entity that owes money to another, often resulting from the provision of goods, services, or loans.

Bank Reconciliation

The process of comparing and adjusting the balance shown in a company’s bank statement, as compared to the company’s own financial records.

Journal Entries

The basic method used in accounting to record transactions, involving debits and credits to appropriate accounts.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company's balance sheet.