Discount on Notes Payable should be classified as a

A) current asset
B) contra account to Notes Payable
C) part of stockholders' equity
D) deferred debit

Question

Discount on Notes Payable should be classified as aA) current assetB) contra account to Notes PayableC) part of stockholders' equityD) deferred debit

Steven Yarbrough · Accepted Answer

Final Answer : B, Explanation :  Discount on Notes Payable represents the difference between the amount borrowed and the amount received by the borrower. It is a contra account to Notes Payable and is deducted from the face value of the liability. It is not a current asset, part of stockholders' equity, or a deferred debit.

Discount on Notes Payable should be classified as a

A) current asset
B) contra account to Notes Payable
C) part of stockholders' equity
D) deferred debit

Definitions

Learning Objectives

Learning Objectives

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