Which of the Following Is Not True About the Discount

question 7

Multiple Choice

Which of the following is not true about the discount on short-term notes payable?

• A) The Discount on Notes Payable account has a debit balance.
• B) The Discount on Notes Payable account should be reported as an asset on the balance sheet.
• C) When there is a discount on a note payable, the effective interest rate is higher than the stated discount rate.
• D) Discount on Notes Payable is a contra account to Notes Payable.

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