Maria is the sole proprietor of an antique store that is located in a rented warehouse.The store has an outstanding loan with the local bank but no other debt obligations.There are no specific assets pledged as security for the loan.Due to a sudden and unexpected downturn in the economy, the store is unable to generate sufficient funds to pay the loan payments due to the bank.Which of the following options does the bank have to collect the money it is owed?
I.Sell the inventory and apply the proceeds to the debt
II.Sell the lighting fixtures from the building and apply the proceeds to the debt
III.Withdraw funds from Maria's personal account at the bank to pay the store's debt
IV.Sell any assets Maria personally owns and apply the proceeds to the store's debt
A)I only
B)III only
C)I and II only
D)I, II, and III only
E)I, III, and IV only

Question

Quizplus · Accepted Answer

Since Maria is a sole proprietor, her personal assets can be used to satisfy business debts. The bank can sell the store's inventory (I) and withdraw funds from Maria's personal account (III). Additionally, the bank can sell Maria's personal assets (IV) to cover the debt.

Maria Is the Sole Proprietor of an Antique Store That