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What is a key difference between a short-term note payable and a current portion of a noncurrent note payable?

a) Interest rates
b) Maturity date
c) Lender identity
d) Collateral requirements

User Benblo
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1 Answer

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Final answer:

The main difference is the maturity date, with a short-term note payable being originally issued with a maturity within a year, while the current portion of a noncurrent note payable represents a portion of a longer-term debt that is now due within a year.

Step-by-step explanation:

The key difference between a short-term note payable and a current portion of a noncurrent note payable is the maturity date. A short-term note payable is a liability that is due within one year from the date of the financial statements or the operating cycle, whichever is longer. On the other hand, the current portion of a noncurrent note payable refers to the part of a long-term debt that is due within the next year. While both liabilities are to be paid within a short timeframe, the current portion of a noncurrent liability originated as part of a longer-term obligation.

User Lelouch
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