When a Note Receivable Is Discounted, the Business That Endorses

question 55

Multiple Choice

When a note receivable is discounted, the business that endorses the note becomes potentially liable to the bank. This type of liability is called a:

• A) dependent liability.
• B) contingent liability.
• C) potential liability.
• D) conditional liability.

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Definitions:

Cross-sectional Area

The area of an object or space as seen from a cut through the object, typically perpendicular to its longest dimension.

Volume

Volume is a measure of the amount of space that an object or substance occupies, commonly expressed in cubic units.

Maximum Sediment Grain Size

The largest diameter of individual grains in a sedimentary deposit, indicating the energy of the transporting medium.

Canyon

A deep gorge, typically with a river flowing through it, carved over time by the erosion of water and weathering processes.