A Business Borrows Cash by Signing a Note Payable

question 87

Multiple Choice

A business borrows cash by signing a note payable. Which of the following accounts will be credited?

• A)Notes Payable
• B)Accounts Payable
• C)Bank
• D)Cash

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting.

Principles-based

An approach focused on general guidelines, allowing for the exercise of professional judgment and flexibility in applying standards.

Bank Reconciliation

The process of matching and balancing figures in accounting records with those displayed on a bank statement.

Outstanding Checks

Checks that have been written and recorded in the account ledger but have not yet been cashed or cleared by the bank.