Calvin,a College Student,wants to Purchase an Automobile on Credit from Irontilt

question 30

Multiple Choice

Calvin,a college student,wants to purchase an automobile on credit from Irontilt Motors.He does not have sufficient income or the credit history to justify the extension of credit to him alone.Calvin asks his father to cosign a note to Irontilt Motors,which his father agrees to.What role does Calvin's father fulfill here so that Calvin can buy the car?

• A) an accommodation party
• B) an agent
• C) a principal
• D) a qualified indorser

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Definitions:

Accounting Events

Transactions or occurrences that result in changes to the financial statements of a company, requiring recognition or disclosure.

Period-To-Period Consistency

An accounting principle ensuring the application of the same accounting methods and principles from one period to the next to ensure financial comparability.

Debits

Accounting entries that increase assets or expenses or decrease liabilities or equity on a company's balance sheet.

Credits

Accounting entries that increase liabilities or equity or decrease assets, representing the opposite effect of debits in the double-entry bookkeeping system.