Quiz Ch 08 – T/F Definition of a Note
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
A written promise with interest to pay a specific amount on a future date is called a note.
A written promise with interest to pay a specific amount on a future date is called a note.
Disclosure of a contingent liability in the financial statements notes is necessary if there is a reasonable likelihood of incurring a loss or expense.
Employee Compensation is synonymous with Payroll.
Service Companies’ Major Expense is Employee Compensation.
Accounts payable is the main financing source for most financing expenses paid by large companies, such as Amazon.
Issuing short-term notes payable increases both liabilities and equity.
Accounts payable is the primary method of inventory purchase for large companies such as Amazon.
Current liabilities relate to day-to-day operations.
Longer payment periods generally indicate better creditworthiness for companies compared to shorter ones.
Accrued Liabilities like Sales Taxes and Commissions are recognized upon sale.