A Promissory Note Differs from a Bill of Exchange in That

question 25

Multiple Choice

A promissory note differs from a bill of exchange in that a promissory note ________.

• A) cannot have a fixed date for payment
• B) is not a written order to pay
• C) is a two-party instrument
• D) is always paid on demand

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Definitions:

LIFO Inventory Method

Last In, First Out, an accounting method where the most recently acquired items are the first to be sold or used.

Gross Profit

The difference between revenue and the cost of goods sold, indicating how efficiently a company uses labor and supplies in production.

FIFO Method

An inventory valuation method that assumes that the first items produced or purchased are the first used or sold.

Unit Costs Decreasing

A situation indicating that the expense incurred to produce a single unit of output is declining, often due to efficiencies or increased production scale.