Promissory Notes Flashcards
What is a promissory note?
Legally binds the buyer unconditionally pay a specific amount of money to the seller within a specific amount of time.
A promissory note is a private______of a _____ ______.
Version
Bank
Loan
How to promissory notes differ to bank loans?
A promissory note states that the person has borrowed from a private organization or individual that is not a bank.
What do promissory notes and bank do the same?
They can both specify an interest amount on the loan.
When do promissory notes date back to? And where?
The 8th and used by the Chinese during the Tang Dynasty.
When did Arab traders also use them?
Around the 12th century
Why were promissory notes useful to traders?
It meant traders didn’t always have to carry large amounts of heavy,bulky coins over long distances. It was too dangerous.
True or False
Promissory notes were such a flop they are note in use today.
False,They are a huge success and are still in use today.
Which principle is an promissory note based on?
An IOU principle.
