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:

Restrictive Covenant

A clause in a contract or deed limiting what the owner of the property can do with it.

Injunction

A court order requiring an individual or entity to do or cease doing a specific action.

Competing Business

A business that offers the same or similar products or services as another business, thereby competing for the same market share.

Unconscionable

Referring to an agreement or contract that is so unfairly one-sided that it is considered oppressive or shocking to the moral conscience.