What is the term for a written promise to repay money on a specified date?

• A. Debt Instrument
• B. Promissory Note
• C. Bond
• D. IOU

Answer: (B)

A promissory note is a written promise to repay money on a specific date. It’s a formal debt instrument that the borrower signs, laying out the amount owed, the due date, and typically the interest terms. This makes it more definite than an IOU, which is usually informal and may not specify a due date or interest. It’s also distinct from a bond, which is a large-scale debt security issued to many investors with standardized terms and longer maturities. While debt instruments is the broad category that includes promissory notes, the precise term for a written promise to repay a sum by a set date is promissory note.