When a Company Issues a Short-Term Note Payable

question 14

Multiple Choice

When a company issues a short-term note payable:

• A)the note payable account is credited.
• B)the note payable is debited.
• C)the interest expense is credited.
• D)the interest expense account is debited.

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Definitions:

Disinflation

A reduction in the rate of inflation; a slowdown in the rate at which prices increase over time.

Sacrifice Ratio

An economic ratio that measures the effect of rising unemployment on the reduction of inflation within an economy.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, eroding purchasing power.

Annual Output

The total value of goods and services produced by an economy or a firm in one year.