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:

Physical Activity

Any movement of the body that requires energy expenditure, contributing to improving or maintaining physical fitness.

Depressant

Depressant describes substances that reduce arousal and stimulation in the body, often prescribed to relieve anxiety, tension, and sleep disorders.

Mental Activity

Any cognitive operation or process by which an individual becomes aware of or perceives ideas, thoughts, and feelings.

Physical Activity

Any bodily movement produced by skeletal muscles that requires energy expenditure, contributing to overall health.