James Has Taken a Loan of $10,000 from a Bank

question 15

Multiple Choice

James has taken a loan of $10,000 from a bank with Julia and Robert as his sureties. Once the money becomes due, Julia seeks an order from the court ordering James to pay. In this example, Julia has used her right of ___.

• A) reimbursement
• B) exoneration
• C) contribution
• D) subrogation

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Definitions:

Journals

Official records where business transactions are entered before they are transferred to accounts in the general ledger.

Ratios

Quantitative relationships between two or more values, often used for financial analysis, to assess the performance, health, and prospects of a business.

Ledgers

Financial records that contain a detailed account of all the financial transactions of a business.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged.