Question 1

Tricia's Decor purchased merchandise from House Beautiful and issued a promissory note.Tricia should record the transaction as:

Accepted Answer

A) debit Purchases and credit Notes Payable for the principal amount of the note. 
B) debit Purchases and credit Notes Payable for the maturity value of the note. 
C) debit Purchases and credit Accounts Payable for the face amount of the note. 
D) debit Purchases and credit Accounts Payable for the maturity value of the note. 
A) debit Purchases and credit Notes Payable for the principal amount of the note. 
B) debit Purchases and credit Notes Payable for the maturity value of the note. 
C) debit Purchases and credit Accounts Payable for the face amount of the note. 
D) debit Purchases and credit Accounts Payable for the maturity value of the note.

Question 2

When a commercial bank discounts a note on the date of issue,the interest is deducted when the note matures.

Accepted Answer

A) True 
 B)False

Question 3

The discount period begins with the date of discount and ends with the maturity date.

Accepted Answer

A) True 
 B)False

Question 4

The process of endorsing a note and transferring it to a financial institution is known as:

Accepted Answer

A) dishonoring a note receivable. 
B) discounting a note receivable. 
C) cosigning a note receivable. 
D) collecting a note receivable. 
A) dishonoring a note receivable. 
B) discounting a note receivable. 
C) cosigning a note receivable. 
D) collecting a note receivable.

Question 5

A $10,000,7% note is dated June 18 and is due in 45 days.The due date would be:

Accepted Answer

A) Aug 1. 
B) Aug 2. 
C) Aug 3. 
D) Aug 4. 
A) Aug 1. 
B) Aug 2. 
C) Aug 3. 
D) Aug 4.

Question 6

Interest calculated for one year on a $8,000,6% promissory note is:

Accepted Answer

A) $4.80. 
B) $480. 
C) $48. 
D) some other amount. 
A) $4.80. 
B) $480. 
C) $48. 
D) some other amount.

Question 7

A promissory note from the sales of merchandise (periodic)would have which effect on the categories?

Accepted Answer

A) Total assets would be increased. 
B) Total liabilities would be increased. 
C) Owner's equity would be decreased. 
D) None of these answers is correct. 
A) Total assets would be increased. 
B) Total liabilities would be increased. 
C) Owner's equity would be decreased. 
D) None of these answers is correct.

Question 8

Paying the principal on a note plus interest would have which effect on the categories?

Accepted Answer

A) Total liabilities would be increased. 
B) Total assets would be decreased. 
C) Owner's equity would be decreased. 
D) B and C could be correct. 
A) Total liabilities would be increased. 
B) Total assets would be decreased. 
C) Owner's equity would be decreased. 
D) B and C could be correct.

Question 9

When a company goes to a bank and exchanges a note for cash,the process is called note trading.

Accepted Answer

A) True 
 B)False

Question 10

How would you compute the accrued interest expense on December 31 for a $5,000 note payable for 75 days at 8% interest dated November 25?

Accepted Answer

$5,000 × .

Question 11

A promissory note issued when receiving a time extension on an amount owed to a suppler would have which effect on the categories?

Accepted Answer

A) Total assets would be increased. 
B) Total liabilities would be increased. 
C) Owner's equity would be decreased. 
D) None of these answers is correct. 
A) Total assets would be increased. 
B) Total liabilities would be increased. 
C) Owner's equity would be decreased. 
D) None of these answers is correct.

Question 12

The entry to record the cash received on a customer's note discounted at less than face value would include a:

Accepted Answer

A) credit to interest income. 
B) debit to notes receivable. 
C) debit to interest expense. 
D) All of the above 
A) credit to interest income. 
B) debit to notes receivable. 
C) debit to interest expense. 
D) All of the above

Tricia's Decor purchased merchandise from House Beautiful and issued a promissory note.Tricia should record the transaction as:

When a commercial bank discounts a note on the date of issue,the interest is deducted when the note matures.

The discount period begins with the date of discount and ends with the maturity date.

The process of endorsing a note and transferring it to a financial institution is known as:

A $10,000,7% note is dated June 18 and is due in 45 days.The due date would be:

Interest calculated for one year on a $8,000,6% promissory note is:

A promissory note from the sales of merchandise (periodic)would have which effect on the categories?

Paying the principal on a note plus interest would have which effect on the categories?

When a company goes to a bank and exchanges a note for cash,the process is called note trading.

How would you compute the accrued interest expense on December 31 for a $5,000 note payable for 75 days at 8% interest dated November 25?

A promissory note issued when receiving a time extension on an amount owed to a suppler would have which effect on the categories?

The entry to record the cash received on a customer's note discounted at less than face value would include a:

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

Filters

Exam 14: Notes Receivable and Notes Payable

Tricia's Decor purchased merchandise from House Beautiful and issued a promissory note.Tricia should record the transaction as:

When a commercial bank discounts a note on the date of issue,the interest is deducted when the note matures.

The discount period begins with the date of discount and ends with the maturity date.

The process of endorsing a note and transferring it to a financial institution is known as:

A $10,000,7% note is dated June 18 and is due in 45 days.The due date would be:

Interest calculated for one year on a $8,000,6% promissory note is:

A promissory note from the sales of merchandise (periodic)would have which effect on the categories?

Paying the principal on a note plus interest would have which effect on the categories?

When a company goes to a bank and exchanges a note for cash,the process is called note trading.

How would you compute the accrued interest expense on December 31 for a $5,000 note payable for 75 days at 8% interest dated November 25?

A promissory note issued when receiving a time extension on an amount owed to a suppler would have which effect on the categories?

The entry to record the cash received on a customer's note discounted at less than face value would include a:

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

Filters