Question

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is​ ________.A.Notes PayableB.Prepaid NoteC.Notes ReceivableD.Accounts Receivable

Answer 1

A.Notes Payable

Step-by-step explanation:

Notes Payable refers to a liability wherein a party signs a promissory note or an agreement in writing, agreeing to pay a certain amount of money coupled with interest on a certain future date.

A note payable specifies details such as the amount of money to be paid, the rate of interest applicable, maturity date, signature of the issuer etc.

The journal entry for issuing notes payable when an amount is payable to a supplier would be;

Accounts Payable Dr

To Notes Payable A/C

(Being notes payable recorded)