A Surety Who Pays a Debtor's Debt to the Creditor

question 2

True/False

A surety who pays a debtor's debt to the creditor gets all the rights the creditor had against the debtor. This is called subrogation.

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Definitions:

Credit Terms

Credit terms are the conditions under which a seller extends credit to a buyer, detailing the repayment period, discount for early payment, and penalty for late payment.

Merchandise

Products or goods that are bought and sold by businesses.

Discount Period

The time frame in which a discount is available for early payment of an invoice.

Implied Annual Interest Rate

The interest rate not explicitly stated but inferred from the terms of a financial instrument over a one-year period.