Which One of the Following Statements Is True

question 63

Multiple Choice

Which one of the following statements is true?

• A) As a promissory note is a one-name paper, only the buyer is required to endorse it.
• B) If a bank agrees to accept it, a corporation can issue a promissory note.
• C) Usually, initial buyers of promissory notes hold them until maturity.
• D) Typically, a promissory note will be issued for 90 days.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid, irrespective of when the transactions actually occurred.

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Asset Account

A financial account that represents the resources owned by a company, which have future economic value.

Liability Account

An accounting record that represents debts or obligations a company owes to others.