Notes Payable and Accounts Payable Both Require a Company to Pay

question 60

True/False

Notes payable and accounts payable both require a company to pay an amount owed by a certain date.Notes payable generally have interest,while accounts payable generally do not.

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Definitions:

Principal

The main party to a transaction, contract, or financial instrument, or the amount of a debt or investment before interest.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal, or the profit earned on savings and investments.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee able to transfer it to another holder.

Good Contract

An agreement that is valid under the law and contains all the essential elements making it enforceable and binding.