A Short-Term Note Payable

question 131

Multiple Choice

A short-term note payable:

• A) Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.
• B) Is a contingent liability.
• C) Is an estimated liability.
• D) Is not a liability until the due date.
• E) Cannot be used to extend the payment period for an account payable.

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Definitions:

Estimated

An approximation or a preliminary calculation of figures based on available data or trends.

Raw Materials Production Needs

The quantity of raw materials required to meet the production schedule, considering inventory levels and future production rates.

Budgeted Cash Receipts

An estimation of the cash inflows expected over a specific period, often part of a company's cash management and forecasting process.

Sales Forecast

An estimate of the future sales revenue and volume over a specific period, based on historical data, market analysis, and other factors.