A note payable is a legal obligation to a creditor that may be unsecured or secured by assets. The terms and conditions of the note, including interest and repayment terms, are specified in a written promissory note. It can be a short-term or long-term liability, depending on the repayment terms.

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A Note Payable Is

Question 20

Multiple Choice

A note payable is

A) a long-term account payable.
B) a legal obligation to a creditor secured by assets.
C) an unsecured legal obligation to a creditor.
D) a legal obligation to a creditor that may be unsecured or secured by assets.

Correct Answer: