A Written Pledge by a Borrower to Pay a Certain

question 129

Multiple Choice

A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date is called

• A) a promissory note.
• B) collateral.
• C) a factor account.
• D) a charge account.
• E) a term loan agreement.

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Definitions:

Buyer

A buyer is a person or entity that purchases goods or services from a seller in exchange for money or other consideration.

Ordinary Course

Activities that are considered normal, customary, or usual for a business under certain conditions.

Security Interest

A legal right or security interest on assets that have been offered as a guarantee, typically for the purpose of ensuring the repayment of borrowed money.

Secured Creditor

A lender that is granted a specific property interest as collateral for a loan, giving the creditor a right to repossess the property if the loan is defaulted.