Which of the Following Is Not True About the Discount

Multiple Choice

Which of the following is not true about the discount on short-term notes payable?

A) The Discount on Notes Payable account has a debit balance.
B) The Discount on Notes Payable account should be reported as an asset on the balance sheet.
C) When there is a discount on a note payable, the effective interest rate is higher than the stated discount rate.
D) Discount on Notes Payable is a contra account to Notes Payable.