What Is the Effect of a Promissory Note Containing a Conditional

question 13

Multiple Choice

What is the effect of a promissory note containing a conditional promise?

• A) The note is void.
• B) The note is enforceable even though it is nonnegotiable.
• C) The note becomes negotiable once the condition is met.
• D) The note is negotiable even though the promise is conditional.

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Definitions:

Balance Sheet Data

Information related to the assets, liabilities, and stockholders' equity of a company as presented in its balance sheet at a specific date.

Current Ratio

An indicator of a business's capability to cover its obligations due in less than a year, determined by dividing the total of current assets by the total of current liabilities.

Marketable Securities

Financial instruments that can be easily converted to cash, such as stocks or bonds.

Horizontal Analysis

A method of financial examination that involves comparing past financial information across different time frames to detect trends and patterns of growth.