Commercial Paper That Is Sold Without the Use of an Actual

question 73

Multiple Choice

Commercial paper that is sold without the use of an actual paper certificate is known as

• A) finance paper.
• B) dealer paper.
• C) book-entry paper.
• D) term paper.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds.

Current Liabilities

Obligations or debts that a company must pay within one year or within its normal operating cycle if longer.

Interest-Bearing Notes

Debt securities that pay interest to the holder at a fixed or variable rate until maturity.

Operating Cycle

The duration between the purchase of inventory and the collection of accounts receivable generated from sales.