A Party Who Is in Possession of an Instrument That

question 4

Multiple Choice

A party who is in possession of an instrument that is payable to the party or to the bearer of the instrument is known as a(n) ________.

• A)holder
• B)third-party beneficiary
• C)payee
• D)assignee
• E)transferee

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Definitions:

Retained Earnings

Retained earnings represent the cumulative amount of net income retained in the company rather than distributed to shareholders as dividends.

Dividends Payable

A financial accounting term referring to the declared dividends to be paid to a corporation's shareholders out of current or retained earnings.

Legal Capital Approach

A method of accounting that maintains capital at a certain legal minimum to protect creditors.