Notes payable are written promises to pay a certain sum of money on a specified future date.
They may arise from purchases, financing, or other transactions.
In some industries, notes (often referred to as trade notes payable) are required as part of the sales/purchase transaction in lieu of the normal extension of open account credit.
Notes payable to banks or loan companies generally arise from cash loans. Notes may be classified as short-term or long-term, depending upon the payment due date.
notes may also be interest-bearing or zero-interest-bearing.