At the end of the year,a company has a short-term note payable outstanding that was entered into earlier in the current year.What accounts relating to the note payable will be reported on the financial statements at the end of the year?
A)Short-term notes payable will be reported on the balance sheet and interest payable will be reported on the income statement.
B)Interest receivable will be reported on the balance sheet.
C)Short-term notes payable and interest payable will be reported on the balance sheet.
D)Short-term notes payable,interest payable and interest expense will be reported on the balance sheet.

Question

Quizplus · Accepted Answer

Short-term notes payable represents the principal amount of the note that is due within the next year and should be reported as a liability on the balance sheet. Interest payable represents the amount of interest that has been accrued but not yet paid and should also be reported as a liability on the balance sheet. Therefore, both short-term notes payable and interest payable will be reported on the balance sheet at the end of the year. Interest expense, on the other hand, will be reported on the income statement. Interest receivable would only be reported if the company was on the other side of the transaction, meaning they were owed interest instead of owing interest.

At the End of the Year,a Company Has a Short-Term