When Credit Is Offered with Only the Invoice as a Formal

question 27

Multiple Choice

When credit is offered with only the invoice as a formal instrument of credit, the credit procedure is called:

• A)invoice account.
• B)open account.
• C)unsecured account.
• D)unsecured note.
• E)None of the above.

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Definitions:

Assignment

The transfer of rights, property, or obligations from one party to another, often used in contexts such as contracts, leases, and insurance policies.

Qualified Indorsement

An endowment that restricts the transfer of a negotiable instrument except under certain conditions.

Negotiability

Negotiability refers to the characteristic of a document or instrument that allows it to be transferred or assigned from one party to another, ensuring the transferee obtains certain legal rights.

Words of Negotiability

Phrases used in financial instruments that indicate the terms under which they can be transferred or assigned to another party.