A Document Guaranteeing Payment of a Specific Amount of Money

question 24

Multiple Choice

A document guaranteeing payment of a specific amount of money to the payer named on the document is

• A) principal.
• B) negotiable.
• C) convenient.
• D) legally binding.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, expressed as a percentage, indicating how much profit a company generates from its total sales.

Quality of Income

A measure of how easily accounting income can be converted to cash, indicating the reliability of earnings.

Gross Profit Percentage

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.