The short term promissory notes are unsecured and not collateralized against securities, hence it is classified as ___________?
Correct answer: C. commercial paper
- A. notes payable
- B. notes receivable
- C. commercial paper
- D. commercial notes
Explanation
Commercial paper consists of short-term, unsecured promissory notes issued mainly by financially sound corporations to meet short-term financing needs. It is not the same as an ordinary notes-payable account.
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