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:

Belief Perseverance

The tendency for people to hold onto their beliefs even when evidence shows those beliefs to be false.

Self-Serving Bias

The widespread inclination to credit personal achievements to one's own qualities while blaming setbacks on outside influences.

Internal Causes

Refer to factors within a person that influence their behavior, thoughts, or emotions, such as personality traits or personal values.

In-group Homogeneity

The perception that members of one's own group are more similar to each other than to those of out-groups, often leading to stereotyping.