| A | B |
|---|
| negotiable insteument | a financial document thats transfers ownership from one person to another |
| promissory note | a written promise to pay a certain sum of money on demand or on a specified date; a formal legal document serving as proof of a debt |
| principal | the amount of money borrowed |
| face value | the amount written on the "face" of a promissory note; the amount received when the contract rate and the market rate of bonds are the same |
| issue date | the date a promissory note is written |
| maturity date | the due date of a promissory note |
| term | the amount of time between the issue date and the maturity date of a promissory note |
| payee | one to whom a promissory note is issued |
| maker | one who issues a promissory note |
| interest | the fee charged for the use of money |
| interest rate | the amount of interest expressed as a percentage of the principal |
| maturity value | principal plus interest; the amount that mustbe repaid on the maturity date |
| interest bearing note | a promissory note requiring the payment of the principal plus interest on the maturity date |
| note recievable | a promissory note accepted by a person or buisness |
| dishonored note | a promissory note that the maker fails to pay or renew on the maturity date |
| notes receivable past due | a current asset account to record dishonored notes |
| discounted notes receivable | selling a note receivable to a bank rather than holding it until maturity |
| bank discount | the amount of interest deducted in advance when a promissory note is discounted |
| proceeds | the amount of cash actually received when a promissory note is discounted; maturity value minus bank discount |
| contingent liability | the liability an endorser has for the payment of a note |
| conservatism principle | an accounting guideline that states that when reporting the financial position of a business, it is best to present amounts that are least likely to overstate income or assets |
| discount period | the period of time between the discount date and the maturity date of a note |
| protest fee | a fee charged when a discounted note is dishonored |
| accrual basis of accounting | an accounting method in which revenue is recognized when earned and expenses when incurred |
| accrued revenue | revenue earned but not yet received and recorded |
| draft | an order by one party (the drawer) to another party (the drawee) to pay a certain sum of money to a third party |
| trade acceptance | a special form of draft that arises out of the sale of merchandise and has this fact noted on its face |
