Mason Corporation Borrows Funds for the Expansion of Its Business

question 13

Multiple Choice

Mason Corporation borrows funds for the expansion of its business.The loan is secured with the office building.Therefore,the office building serves as _____ for the loan.

• A)a liability
• B)a collateral
• C)a debt
• D)an insurance
• E)a corporate deposit

---

Definitions:

Payments

Payments refer to the transfer of money from one party to another, often as compensation for goods or services.

Petty Cash Fund

A small amount of cash kept on hand within a business for minor and immediate expenses.

Internal Control

Initiatives and standards implemented by a firm to assure the correctness of financial and accountancy details, encourage integrity, and obstruct fraudulent activities.

Journal Entries

The method by which all business transactions are initially recorded, using a system of debits and credits, to maintain the financial records of an entity.