A Two-Party Negotiable Instrument That Is a Special Form of Note

question 12

Multiple Choice

A two-party negotiable instrument that is a special form of note created when a person deposits money at a financial institution in exchange for the institution's promise to pay back the amount of the deposit plus an agreed-on rate of interest upon the expiration of a set time period agreed upon by the parties is known as a ________.

• A) collateral note
• B) check
• C) certificate of deposit
• D) bill of exchange

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Definitions:

Double-Declining-Balance Method

An accelerated depreciation method that expenses more of an asset’s cost closer to the beginning of its usable life.

Depreciable Asset Accounting

The accounting process that involves allocating the cost of a tangible asset over its useful life.

Depreciation Expense

The portion of the total cost of a depreciable asset that is allocated as an expense to the income statement in a given period.

Residual Value

The estimated value of a leased asset at the end of the lease term, or the expected value of an asset after its useful life ends.