An Unconditional Written Promise to Pay a Definite Sum of Money

question 9

Multiple Choice

An unconditional written promise to pay a definite sum of money on demand or on a defined future date (or dates) is a(n)

• A) unearned revenue
• B) prepaid expense
• C) account payable
• D) notes receivable
• E) account receivable

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, with rights to dividends and voting in corporate matters.

Treasury Stock

Shares of a company's own stock that it has reacquired but not yet retired or resold.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, reflecting the investment in the business.

Dividends Payable

A liability account that represents the amount of dividends that a company has declared but not yet paid out to its shareholders.