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Chapter 2
MAIN DISCUSSION I. Definition of terms
According to Laman, R.M. & Laman, V.P. (2010)., the birth of the credit system has made the use of the documents covering credit transactions both imperative and important, such documents are known as credit instruments. While credit transaction need not be evidenced by written contract, nevertheless, it appears sufficiently clear that it is better than they are. Credit instruments are documents that serve as an evidence of debt, this defines the responsibility of the debtor to his creditor and the right of the creditor to collect from the debtor at the specified time.
Bonds are promises of the payment of interest and principals to the holder at a particular time. It is a written or printed acknowledgment of debt. It is a certificate of liability or obligation. Bonds are debt and are issued for more than one year.
Stocks are permanent invested capital contributed by the stockholders or owners of a corporation which are proved by certificates. It is a share of a company held by an individual.
Miranda (2001) defined check as a written order drawn by a depositor, directing it to pay on demand a specified sum of money. Check is the most commonly used bill of exchange. It is a written, dated and signed instrument.
Promissory note is the simplest form of a credit instrument. It is a written promise of an individual to pay a certain amount of money at certain time in the future to an appointed person or bearer.

II. Kinds of credit instruments
Credit instrument existed before coinage. In Assyria in 8th century B.C. people used clay tablets and fragments that were like the bills of exchange and promissory notes that we are using today. But the use of credit instrument did not become popular till the middle age because the people preferred to trade rather than had a liability. Today, the use of credit

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