A written promise to pay a definite sum of money on a specific future date is a(n):
A)Unearned revenue
B)Prepaid expense
C)Credit account
D)Note payable
E)Account receivable

Question

Quizplus · Accepted Answer

A written promise to pay a definite sum of money on a specific future date is called a note payable. Therefore, option D is the correct answer. Unearned revenue and prepaid expense are liabilities, but they are not related to a written promise to pay a definite sum of money on a specific future date. Credit account and account receivable are also liabilities, but they are related to different types of transactions, and not to a note payable.

A Written Promise to Pay a Definite Sum of Money