When a Note Payable Is Given to Settle an Existing

question 18

Multiple Choice

When a note payable is given to settle an existing account payable,

• A) There is no net change in assets, liabilities, or owners' equity
• B) Net assets are increased
• C) Net liabilities are increased
• D) Net owners' equity is increased

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Definitions:

Remedial Action

Measures taken to correct or mitigate a problem, often after it has been identified through analysis or inspection.

Safety Stock

A quantity of inventory kept on hand to protect against variability in demand or lead time.

Average Demand

The mean amount of a product or service required by customers over a specific period of time, used for inventory and production planning.

Lead Time

The total time taken from the initiation of a process or project until its completion, often used in manufacturing or project planning to indicate the time needed from ordering a product to its delivery.