If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the
A) completeness assertion.
B) existence assertion.
C) cutoff assertion.
D) classification assertion.

Question

Quizplus · Accepted Answer

The classification assertion is violated when a short-term note payable is included in the accounts payable balance because they are two different types of liabilities. Accounts payable represents the amount owed for goods or services purchased on credit, while short-term notes payable represent a formal agreement to borrow money for a specific period of time. Therefore, they should be reported separately on the financial statements.

If a Short-Term Note Payable Is Included in the Accounts