Problemas
Question 6 A short-term note payable: Is an estimated liability. Is a contingent liability. Is not a liability until the due date. Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle.whichever is longer. Cannot be used to extend the payment period for an account payable. 2.5 pts
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Patricia
maestro · Tutor durante 5 años
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The correct answer is:**"Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer."**### Explanation:A short-term note payable is a formal, written agreement in which a company promises to pay a specific amount of money (principal) plus interest by a certain date. It is classified as a **current liability** because it is due within one year or the company's operating cycle, whichever is longer. Let’s analyze the other options:1. **Is an estimated liability**: Incorrect. A short-term note payable is not an estimated liability; it is a known and fixed obligation with a specific amount and due date.2. **Is a contingent liability**: Incorrect. A contingent liability depends on uncertain future events, whereas a short-term note payable is a definite obligation.3. **Is not a liability until the due date**: Incorrect. The note becomes a liability as soon as it is issued, not just on the due date.4. **Cannot be used to extend the payment period for an account payable**: Incorrect. Short-term notes payable are often used to replace or extend accounts payable when a formal agreement is needed.Thus, the most accurate description is that it is a written promise to pay a specified amount within one year or the operating cycle.