If a Company Does Not Pay Its Note Payable on the Agreed

question 98

Multiple Choice

If a company does not pay its note payable on the agreed upon date,the note:

• A)is renewed automatically for the same period of time.
• B)is discounted at a higher rate of interest.
• C)is dishonored by the vendor.
• D)is automatically placed in collection with an outside agency.

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Definitions:

Government Bonds

Debt securities issued by a government to finance its expenditures, offering a fixed or variable interest rate over time.

Private Company

A business entity owned by private individuals or entities, not publicly traded on the stock market, and not subject to the same reporting requirements as a public company.

Merchantable Quality

A standard that ensures goods are of a quality that is acceptable for sale and fit for the purpose for which they are bought.

Risk of Loss

The potential that an asset might be destroyed, damaged, or lost, impacting its owner financially or legally.