Match Each Definition with the Correct Term Below

question 71

Multiple Choice

Match each definition with the correct term below.
-Commercial paper

• A)Definite debts or obligations whose exact dollar amount cannot be known until a later date.
• B)Liabilities due beyond one year or beyond the normal operating cycle.
• C)Unsecured loans that are sold to the public ,usually through professionally managed investment firms.
• D)The cost of using money for a specific period.
• E)A potential liability that depends on a future event arising out of a past transaction.
• F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
• G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
• H)A legal obligation that does not meet the technical requirements for recognition as a liability.
• I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
• J)The interest cost for one or more periods when the principal sum stays the same from period to period.

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Definitions:

Purchase Requisition

An internal document used within an organization to request authorization for a purchase before a purchase order is issued.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.

Credit Memorandum

A document issued by a seller indicating a reduction in the amount that a buyer owes, often due to a return or refund.

F.O.B. Shipping Point

A term used in shipping contracts to indicate that the buyer is responsible for the goods and their transportation costs once they leave the seller's premises.