Concept:Set-off means combining two mutual balances when the same party owes and is owed, to record only the net amount.
Explanation:In control accounts, set-off is used when a single person or firm deals with the business in two opposite roles.
The same party is both a debtor (customer) and a creditor (supplier) of the business.
Instead of passing two separate entries, the business offsets the amount owed against the amount receivable.
This reduces the balances in both the sales ledger control account and the purchases ledger control account.
Hence, set-off arises only when the same organization acts as both customer and supplier.
Answer:A. a business organization is both a customer and a supplier