Question 1

The maturity date for a 90-day note dated February 10,2016,a leap year is:

Accepted Answer

A) May 10. 
B) April 10. 
C) May 11. 
D) May 9. 
A) May 10. 
B) April 10. 
C) May 11. 
D) May 9.

Question 2

The proceeds of a discounted note are the maturity value less the bank discount.

Accepted Answer

A) True 
 B)False

Question 3

When an interest-bearing note comes due and is uncollectible,the journal entry includes:

Accepted Answer

A) debiting Notes Receivable;crediting Accounts Receivable. 
B) debiting Notes Receivable;crediting Accounts Receivable and Interest Revenue. 
C) debiting Accounts Receivable;crediting Interest Revenue. 
D) debiting Accounts Receivable;crediting Notes Receivable and Interest Revenue. 
A) debiting Notes Receivable;crediting Accounts Receivable. 
B) debiting Notes Receivable;crediting Accounts Receivable and Interest Revenue. 
C) debiting Accounts Receivable;crediting Interest Revenue. 
D) debiting Accounts Receivable;crediting Notes Receivable and Interest Revenue.

Question 4

There was no accrual for interest on a promissory note receivable;this error would cause:

Accepted Answer

A) the period end assets to be overstated. 
B) the period end liabilities to be understated. 
C) the period's net income to be overstated. 
D) the period's net income to be understated. 
A) the period end assets to be overstated. 
B) the period end liabilities to be understated. 
C) the period's net income to be overstated. 
D) the period's net income to be understated.

Question 5

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Interest income } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 6

Explain what happens to assets and to liabilities when a borrower issues a note payable for the purchase of equipment?

Accepted Answer

The total assets and liabiliti

Question 7

A promissory note:

Accepted Answer

A) is a written promise to pay. 
B) is an oral promise to pay. 
C) is due in 30 days. 
D) entitles the maker to a discount. 
A) is a written promise to pay. 
B) is an oral promise to pay. 
C) is due in 30 days. 
D) entitles the maker to a discount.

Question 8

Describe (a)the function of a promissory note and (b)explain its various parts and features.

Accepted Answer

a)
A promissory note is a written promis

Question 9

A written promise to pay a certain sum of money to another person or company is a:

Accepted Answer

A) Promissory Accounts Payable. 
B) Promissory Note Payable. 
C) Promissory Accounts Receivable. 
D) Promissory Note Receivable. 
A) Promissory Accounts Payable. 
B) Promissory Note Payable. 
C) Promissory Accounts Receivable. 
D) Promissory Note Receivable.

Question 10

Harvey loaned $450 to Chase and received a promissory note.Harvey is the:

Accepted Answer

A) maker. 
B) drawee. 
C) payee. 
D) debtor. 
A) maker. 
B) drawee. 
C) payee. 
D) debtor.

Question 11

Steadman's Computer endorses a customer's note dated June 17 to the bank on August 6.The interest rate on the note is 10%,and the bank discount rate is 12%.The note matures on September 6.The discount period is:

Accepted Answer

A) 31 days. 
B) 60 days. 
C) 81 days. 
D) 0 days. 
A) 31 days. 
B) 60 days. 
C) 81 days. 
D) 0 days.

Question 12

Prepare the journal entries for Fit City Company for the following transactions:
a)Fit City sold $7,500 of merchandise to AllSport Company on account.The company uses the periodic method.
b)Fit City received a 120-day,$7,500,8% note for a time extension of past-due account of AllSport.
c)Collected the AllSport note on the maturity date.

Accepted Answer

The answer of Prepare the journal entries for Fit City...

Question 13

Mountain Site discounts a customer's 10%,$7,000,90-day note dated August 1,on September 20.The discount period is 40 days,and the bank discount rate is 18%.The maturity value of the note is $7,175.The bank discount is $143.50.The proceeds of the note are:

Accepted Answer

A) $7,041.50. 
B) $7,031.50. 
C) $6,856.50. 
D) $7,000.00. 
A) $7,041.50. 
B) $7,031.50. 
C) $6,856.50. 
D) $7,000.00.

Question 14

The payee is the party to whom the note is payable.

Accepted Answer

A) True 
 B)False

Question 15

The person or company promising to pay the note plus interest when it comes due is known as the

Accepted Answer

A) drawee. 
B) creditor. 
C) maker. 
D) payee. 
A) drawee. 
B) creditor. 
C) maker. 
D) payee.

Question 16

The formula for calculating interest on a note is: principal × rate × time.

Accepted Answer

A) True 
 B)False

Question 17

Straight Company sold merchandise to Cross Company and received a promissory note from Cross.Straight should record the transaction as:

Accepted Answer

A) debit Notes Receivable and credit Sales for the principal amount of the note. 
B) debit Notes Receivable and credit Sales for the maturity value of the note. 
C) debit Accounts Receivable and credit Sales for the maturity amount of the note. 
D) debit Accounts Receivable and credit Sales for the principal amount of the note. 
A) debit Notes Receivable and credit Sales for the principal amount of the note. 
B) debit Notes Receivable and credit Sales for the maturity value of the note. 
C) debit Accounts Receivable and credit Sales for the maturity amount of the note. 
D) debit Accounts Receivable and credit Sales for the principal amount of the note.

Question 18

Chase Hunford negotiated a $50,000 bank loan for 210 days at a bank rate of 12%.The bank deducted the interest in advance.
Required (show your calculations):
a)Calculate the amount of interest charged by the bank.
b)Calculate the amount of cash Chase received from the bank.
c)Calculate the effective interest rate charged by the bank.
d)Prepare Chase's journal entry for the transaction.

Accepted Answer

a)$50,000 × .12 × 210/360 = $3

Question 19

Prepare the journal entries for the following transactions for Dobson Industries Company.
a)Dobson sold $8,000 of merchandise to Bolt Imports Company on account.The company uses the periodic method.
b)Dobson accepted a 90-day,7% note from Bolt in settlement of its account.
c)Bolt defaulted on its note on the maturity date.
d)Collected the previously defaulted Bolt note plus $25 additional interest.

Accepted Answer

The answer of Prepare the journal entries for the following...

Question 20

Warner Enterprises was unable to collect a $1,500 note receivable plus $75 interest on the maturity date,but hoped to collect the amount in the future.Warner should record this as:

Accepted Answer

A) debit Bad Debts Expense $1,500;credit Notes Receivable $1,500. 
B) debit Allowance for Doubtful Accounts $1,575;credit Notes Receivable $1,575. 
C) debit Accounts Receivable $1,500;credit Interest Income $75;credit Cash $1,575. 
D) debit Accounts Receivable $1,575;credit Interest Income $75;credit Notes Receivable $1,500. 
A) debit Bad Debts Expense $1,500;credit Notes Receivable $1,500. 
B) debit Allowance for Doubtful Accounts $1,575;credit Notes Receivable $1,575. 
C) debit Accounts Receivable $1,500;credit Interest Income $75;credit Cash $1,575. 
D) debit Accounts Receivable $1,575;credit Interest Income $75;credit Notes Receivable $1,500.

Exam 14: Notes Receivable and Notes Payable

The maturity date for a 90-day note dated February 10,2016,a leap year is:

The proceeds of a discounted note are the maturity value less the bank discount.

When an interest-bearing note comes due and is uncollectible,the journal entry includes:

There was no accrual for interest on a promissory note receivable;this error would cause:

Explain what happens to assets and to liabilities when a borrower issues a note payable for the purchase of equipment?

A promissory note:

Describe (a)the function of a promissory note and (b)explain its various parts and features.

A written promise to pay a certain sum of money to another person or company is a:

Harvey loaned $450 to Chase and received a promissory note.Harvey is the:

Steadman's Computer endorses a customer's note dated June 17 to the bank on August 6.The interest rate on the note is 10%,and the bank discount rate is 12%.The note matures on September 6.The discount period is:

Mountain Site discounts a customer's 10%,$7,000,90-day note dated August 1,on September 20.The discount period is 40 days,and the bank discount rate is 18%.The maturity value of the note is $7,175.The bank discount is $143.50.The proceeds of the note are:

The payee is the party to whom the note is payable.

The person or company promising to pay the note plus interest when it comes due is known as the

The formula for calculating interest on a note is: principal × rate × time.

Straight Company sold merchandise to Cross Company and received a promissory note from Cross.Straight should record the transaction as:

Warner Enterprises was unable to collect a $1,500 note receivable plus $75 interest on the maturity date,but hoped to collect the amount in the future.Warner should record this as:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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