Notes receivable is supported by a promissory note.Group of answer choicesTrueFalse
Question
Notes receivable is supported by a promissory note.
- Group of answer choices
- True
- False
Solution
Answer
True
Notes receivable are indeed supported by a promissory note. A promissory note is a written promise to pay a specified sum of money to a specific person or bearer at a designated time or on demand. When a company or an individual extends credit in the form of a note receivable, they typically require the borrower to sign a promissory note, which outlines the terms of the loan, including the amount borrowed, interest rate, repayment schedule, and maturity date. This legal document serves as evidence of the debt and provides the lender with certain rights, making it a secure form of receivable. Thus, the statement is accurate: notes receivable do have promissory notes backing them.
Similar Questions
Notes receivable are recognized in the accounts atGroup of answer choicescash (net) realizable valueface value.gross realizable valuematurity value
If the maker of a promissory note fails to pay the note on the due date, the note is said to beGroup of answer choicesdishonoreddiscounteddisalloweddisplaced
The following are required information on a note, EXCEPT:Group of answer choicesInterest rate and discount ratePayee and makerFace valueIssue date and term
If the principal amount of the note is payable in lump-sum, the entity should use the present value of 1.Group of answer choicesTrueFalse
The interest collection is computed by multiplying the nominal interest with the face value of the note.Group of answer choicesTrueFalse
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.