Which of the Following Statements Is TRUE with Respect to Promissory

question 28

Multiple Choice

Which of the following statements is TRUE with respect to promissory notes?

• A)A promissory note always involves three different parties, called the maker, the payee, and the payer.
• B)Unlike a cheque or a bill of exchange, a promissory note is effective even without consideration because it consists of a promise to pay money.
• C)The subject matter of a promissory note can be either the payment of money or the performance of services.
• D)A promissory note must be payable in instalments.
• E)A promissory note usually requires the payment of interest, but it need not do so.

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Definitions:

Cost-Plus Pricing

A pricing method that involves adding a consistent percentage markup to the total production cost of a product or service to set its sale price.

Mark-Up Percentage

The percentage added to the cost price of goods to cover overhead and profit, determining the selling price.

Material Charge

A fee or cost applied for the materials used in the manufacturing or production of goods.

Material Cost

The cost of raw materials and components used to create a product.