A ________ Is an Agreement by the Person Who Issues

question 106

Multiple Choice

A ________ is an agreement by the person who issues the letter to pay a sum of money on receipt of an invoice and other documents.

• A)commercial bond
• B)letter of credit
• C)letter of acknowledgement
• D)negotiated credit instrument
• E)recognizance

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Definitions:

Depreciation Expense

Depreciation expense is the allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, age, or obsolescence.

Plant Asset

Long-term assets such as buildings, machinery, and equipment used in the operations of a business.

Allocated

The process of assigning or distributing resources, costs, or revenues to various accounts or cost centers based on a specific criterion or formula.

Accrued Expense

An accounting term for expenses that have been incurred but not yet paid, recorded on the books to reflect true financial position.