ABC Signed a 5- Year, 9% Note Payable for $80

question 10

Multiple Choice

ABC signed a 5- year, 9% note payable for $80 000 on 1 May 2014. Which account will be credited when the note paid at maturity?

• A)Interest payable
• B)Cash
• C)Interest expense
• D)Note payable

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Definitions:

Business Entity

An organization that exists as a separate and distinct legal unit, capable of conducting business, entering into agreements, and owning property.

Operating Cycle

The average time period it takes for a business to convert its inventory into cash through sales.

Business Entity

An organization that engages in economic activities, recognized as a separate legal entity from its owners.

Less than Six Months

A term used to describe a period or duration that does not exceed six months.