What is difference b/w narrative payable and make a note of payable?
Please illustrate with definition, and two examples for respectively, so it might be possible for me to understand. Thanks
Answers: A make a note of payable is a loan a company owes. Accounts payable are the short term bills a company owes, for stock and services like utilities..
While both of these are liability, Notes Payable involves a written promissory note. For example, if your company wishes to borrow $100,000 from its mound, the bank will require company officer to sign a formal loan agreement before the edge provides the money. (The bank might also require your company to pledge collateral and for the company owners to instinctively guarantee the loan.) Perhaps the loan paperwork will be a half inch dignified. Your company will record this loan surrounded by its general ledger explanation, Notes Payable. (The bank will dictation the loan in its nonspecific ledger account Notes Receivable.)
Contrast the wall loan with phoning one of your company’s suppliers and asking for a labour of products or supplies. On the next year the products arrive and you sign the delivery reception. A few days later your company receive an invoice from the supplier and it states that the payment for the products is due surrounded by 30 days. This transaction did not involve a promissory note. As a result, this transaction is record in your company’s standard ledger account Accounts Payable. The supplier will account the transaction with a debit to its asset narrative Accounts Receivable (and a credit to its account Sales).
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Answers: A make a note of payable is a loan a company owes. Accounts payable are the short term bills a company owes, for stock and services like utilities..
While both of these are liability, Notes Payable involves a written promissory note. For example, if your company wishes to borrow $100,000 from its mound, the bank will require company officer to sign a formal loan agreement before the edge provides the money. (The bank might also require your company to pledge collateral and for the company owners to instinctively guarantee the loan.) Perhaps the loan paperwork will be a half inch dignified. Your company will record this loan surrounded by its general ledger explanation, Notes Payable. (The bank will dictation the loan in its nonspecific ledger account Notes Receivable.)
Contrast the wall loan with phoning one of your company’s suppliers and asking for a labour of products or supplies. On the next year the products arrive and you sign the delivery reception. A few days later your company receive an invoice from the supplier and it states that the payment for the products is due surrounded by 30 days. This transaction did not involve a promissory note. As a result, this transaction is record in your company’s standard ledger account Accounts Payable. The supplier will account the transaction with a debit to its asset narrative Accounts Receivable (and a credit to its account Sales).