When Chris Charges a Gallon of Chlorine for His Pool

question 93

Multiple Choice

When Chris charges a gallon of chlorine for his pool at Pinch-A-Penny to his store account,he creates a/an ______________ for the retailer.

• A) notes payable
• B) accounts payable
• C) notes receivable
• D) long-term liability
• E) accounts receivable

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Definitions:

Fraudulent Preference

A debtor’s payment of money to one creditor to give that creditor preference over the other creditors.

Breach of Contract

The violation of any of the agreed-upon terms and conditions of a binding contract, which may result in legal action.

Chartered Banks

Chartered Banks are financial institutions that have been granted a charter or license by the government, allowing them to operate and offer a range of banking services, such as accepting deposits and making loans.

Secured Creditor

A creditor who has a claim on property of the debtor, giving him priority on that property over other creditors.