Which statement is correct?
A)Trade payables are supported by a written promise to pay.
B)Trade payables with no stated interest rate do not need to be discounted.
C)Notes payable are legally enforceable and can only be interest bearing.
D)Notes payables are recognized at the face value or transaction price.

Question

Quizplus · Accepted Answer

Trade payables with no stated interest rate do not need to be discounted. This is because trade payables with no stated interest rate are considered to be short-term liabilities and they are typically due within a few months. As a result, the time value of money is insignificant and there is no need to discount them.

Which Statement Is Correct