How Will the Lender of the Promissory Note Record the Note

question 20

Multiple Choice

How will the lender of the promissory note record the note on its books?

• A) as an asset
• B) as a contra asset
• C) as revenue
• D) as an expense

---

Definitions:

Incompetent

Lacking the necessary ability, knowledge, or fitness to perform a legally designated responsibility or action effectively.

Undisclosed Principal

An undisclosed principal is a party in a contractual agreement who remains unknown to the other party or parties involved.

Unidentified Principal

In agency law, this refers to a situation where an agent acts on behalf of a principal who is not disclosed to the third party at the time of the transaction.

Liability

The state of being legally responsible for something, typically involving financial or legal obligations that result from one's actions or agreements.