Commercial and Farm Mortgages,in Which Property Is Pledged as Collateral,account

question 17

Multiple Choice

Commercial and farm mortgages,in which property is pledged as collateral,account for

• A)one-quarter of borrowing by nonfinancial businesses.
• B)one-half of borrowing by nonfinancial businesses.
• C)one-twentieth of borrowing by nonfinancial businesses.
• D)two-thirds of borrowing by nonfinancial businesses.

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Definitions:

Dishonored Note

A promissory note that has not been paid by the maker at the time of maturity, resulting in default.

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to another, either at a fixed or determinable future time or on demand.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal amount.

Allowance Method

An accounting technique used to account for accounts receivable that a company does not expect to collect fully, thereby creating an allowance for doubtful accounts.