Short-Term Notes Payable

question 57

Multiple Choice

Short-term notes payable:

• A) are generally due within three months, with a maximum time period of six months
• B) are shown as a reduction to notes receivable on the balance sheet, with an appropriate footnote disclosure
• C) are shown on the balance sheet with current liabilities
• D) are shown on the balance sheet after bonds payable

---

Definitions:

Consumer Note

A debt instrument in which the buyer agrees to pay the seller a specified amount of money at a later date, often with interest.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Certified Cheque

A bank-endorsed cheque that confirms the drawer has sufficient funds in their account to cover the cheque's amount.

Bill Of Exchange

A written, unconditional order by one party directing another party to pay a fixed sum of money to a third party on demand or at a set time.