If a Note Receivable Is Discounted with Recourse and the Customer

question 70

Multiple Choice

If a note receivable is discounted with recourse and the customer defaults at final payment,the seller

• A)has no obligation to the bank.
• B)must repay the full amount of the note plus interest to the bank.
• C)must refund the proceeds of the discounting to the bank.
• D)must repay the principal only to the bank.

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Definitions:

Standards

Established norms or criteria which define acceptable levels of quality, behavior, or performance.

Affect People

A broad term that could relate to how emotions and mood influence human behavior and interaction.

Overjustification Effect

A phenomenon where providing excessive external rewards for an already internally rewarding activity reduces a person's intrinsic motivation.

Example

A representative case or model that illustrates a general rule or serves as a typical instance of a particular phenomenon.