Chap 16 Flashcards
Bank Draft
a 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 used to calculate interest on a note
Bill of Lading
a business document that lists goods accepted for transportation
Cashier’s Check
a draft on the issuing bank’s own funds
Commercial Draft
a note issued by one party that orders another party to pay a specified sum on a specified date
Contingent Liability
an item that can become liability if certain things happen
Discounting
deducting the interest from the principle on a note payable or receivable in advance
Draft
a 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 of interest or discounts
Interest
the fee charged for the use of money
Maturity Value
the total amount (principle plus interest) payable when a note comes due
Negotiable Instrument
a 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 to the maker of the note (the debtor) to pay another party (the creditor) a specified amount at a specified future date
Note Receivable
an asset representing a written promise by another party (the debtor) to pay the note holder (the creditor) a specified amount at a specified future date.
Principle
the amount shown on the face of the note
