Explain the Difference Between Temporary and Permanent Accounts

question 173

Essay

Explain the difference between temporary and permanent accounts.

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Definitions:

Credit

The ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Uniform Commercial Code

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions.

Non-negotiable Instrument

A document or contract that cannot be transferred or assigned from one person to another in a way that the receiver obtains the legal right to it.

Holder in Due Course

A party that has acquired a negotiable instrument in good faith and for consideration, thereby obtaining certain rights free of many defenses available to the original parties.