Ch 16 - Notes Payable and Receivable VOCAB Flashcards
“bank draft”
check written by a bank that orders another bank to pay the stated amount to a specific party
“banker’s year”
a 360-day period to calculate interest on a note
“bill of lading”
business document that lists goods accepted for transportation
“cashier’s check”
draft on the issuing bank’s own funds
“commercial draft”
note issued by one part that orders another party to pay a specified sum on a specified date
“contingent liability”
an item that can become a liability if certain things happen
“discounting”
deducting the interest from the principal on a note payable or receivable in advance
“draft”
written order that requires one party (a person or business) to pay a stated sum of money to another party
“face value”
an amount of money indicated to be paid, exclusive or interest or discounts
“interest”
the fee charged for use of the money
“maturity value”
the total amount (principal + interest) payable when a note comes due
“negotiable instrument”
financial document containing a promise or order to pay that meets all requirements of the Uniform Commercial Code in order to be transferable to another party
“note payable”
a liability representing a written promise by the maker of the note (debtor) to pay another party (creditor) specified amount at specified future date
“note receivable”
asset representing a written promise by another party (debtor) to pay the note holder (creditor) specified amount at specified future date
“principal”
amount shown on the face of a note
