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Intro to Accounting > Notes Payable and Notes Recievable > Flashcards

Flashcards in Notes Payable and Notes Recievable Deck (10)
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1

What is a Negotiable instrument ?

it is a financial document containing a promise or order to pay, that meets the UCC requirements to be transferable to another party.

2

What is a note payable?

it is a liability that represents a written promise by the debtor to pay the creditor a specified amount at a specified future date.

3

What is interest

it is the fee charged for the use of money.

4

Interest= Principal X ? X ?

rate X Time

5

What is maturity value?

it is the total amount that must be paid when a note becomes due.

6

Current liabilities for notes payable are what?

Liabilities that are due within one year.

7

What is a note receivable?

it is an asset representing a written promise by the debtor to pay the creditor a specified amount at a specified future date.

8

how long is a bankers year?

360 days

9

What is the discount period of a note?

it is the period from when a note is taken to a bank to be discounted (or sold) and it continues on to the maturity dates.

10

What is a Contingent Liability?

it is an item that can become a liability if certain future events happen.