INTERNAL CONTROL: NOTES PAYABLE

Notes Payable

- Legal obligation to a creditor, which may be unsecured or secured by assets, and bears interest.
- Long – term or short term

Internal Controls: 4 important controls over notes payable

1. Proper authorization for the issue of notes

2. Adequate controls over the repayment of principal and interest
3. Proper documents and records
4. Periodic independent verification