|Author||Topic: Difference between Notes Payable and Trade Account Payable|
I'm confused about the following things:
First, what's the difference between Notes Payable and Trade Account Payable?
Second, what is Treasury Stock? When would it appear? Is it there any different with Common Stock or Preference Stock?
Thanks a lot for helping!
|Notes payable is used if there is some kind of loan outstanding, usually long term, to entities other than you do business with. Trade accounts payable is used when money is due to your suppliers.
Treasury stock would appear on your balance sheet if you buy back your common stock. If you re-sell them then any gain/loss would be shown as a seperate line item in Paid in capital of the euity section. You may use retained earnings account to write off the loss but the gain can't be added to retained earnings. Hence, common and preference stock is completely different.