Notes Payable and Notes Recievable Flashcards
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.
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.
What is interest
it is the fee charged for the use of money.
Interest= Principal X ? X ?
rate X Time
What is maturity value?
it is the total amount that must be paid when a note becomes due.
Current liabilities for notes payable are what?
Liabilities that are due within one year.
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.
how long is a bankers year?
360 days
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.
What is a Contingent Liability?
it is an item that can become a liability if certain future events happen.
