Deborah Executes an Unconditional Written Agreement to Pay $5,000 to Bill

question 10

Multiple Choice

Deborah executes an unconditional written agreement to pay $5,000 to Bill on or before February 15,2015.In this scenario,Deborah has drawn a ________.

• A) promissory note
• B) draft
• C) check
• D) money order

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Definitions:

Net Income

Total earnings of a company after all expenses and taxes have been deducted from total revenue.

Note Receivable

A financial asset representing a written promise for a debtor to pay a specified sum of money to the creditor on a demand or at a future date.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity, reflected in its cash flows.

Principal Collection

refers to the portion of payments received that goes towards reducing the outstanding principal balance of a loan.