A Business Borrows Cash by Signing a Note Payable

question 28

Multiple Choice

A business borrows cash by signing a note payable.Which account is debited?

• A) Notes payable
• B) Accounts payable
• C) Accounts receivable
• D) Cash

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Definitions:

Break-Even

The point where overall expenses match overall income, leading to neither a profit nor a loss.

Variable Costs

Expenditures that adjust according to the quantity of goods or services produced by an enterprise.

Fixed Costs

Regular outgoings that stay the same whether production or sales rates increase or decrease, for instance, rental costs or salary payments.

Net Income

This refers to the total profit of a company after all expenses and taxes have been deducted from total revenue.