Question 1

The proper entry to make when a note is paid at maturity depends on whether it is an interest-bearing or a non-interest-bearing note.

Accepted Answer

A) True 
 B)False

Question 2

The interest due at maturity on a $489.52, 8% note, dated May 28 and due August 2 is

Accepted Answer

A)  $4.37. 
B)  $6.04. 
C)  $7.18. 
D)  $6.30. 
A)  $4.37. 
B)  $6.04. 
C)  $7.18. 
D)  $6.30.

Question 3

Match the terms with the definitions.
-The procedure, which banks often use, of deducting interest in advance when making a loan.

Accepted Answer

A) term of the note 
B) accrued interest on notes receivable 
C) bank discount (note payable) 
D) bank discount (note receivable) 
E) contingent liability
F)rate of interest
G)discounting (note payable)
H)payee
I)notes receivable register
J)non-interest-bearing note
K)interest-bearing note 
A) term of the note 
B) accrued interest on notes receivable 
C) bank discount (note payable) 
D) bank discount (note receivable) 
E) contingent liability
F)rate of interest
G)discounting (note payable)
H)payee
I)notes receivable register
J)non-interest-bearing note
K)interest-bearing note

Question 4

In computing interest, it is customary to consider 360 days as a year.

Accepted Answer

A) True 
 B)False

Question 5

The correct entry to make when a note is paid at maturity depends on whether the note is interest bearing or non-interest bearing.

Accepted Answer

A) True 
 B)False

Question 6

The amount of interest on a 10% note of $600 dated May 7 and due July 18 would be $12.00.

Accepted Answer

A) True 
 B)False

Question 7

The information contained in the notes receivable register normally is obtained from the general ledger accounts.

Accepted Answer

A) True 
 B)False

Question 8

Match the terms with the definitions.
-The interest amount paid divided by the proceeds received on a discounted note. This amount will differ from the stated rate on the face of the note.

Accepted Answer

A) accrued interest on notes payable 
B) time 
C) proceeds (note receivable) 
D) principal of the note 
E) notes payable register
F)credit advice
G)maturity value
H)discounting a note receivable
I)dishonored
J)effective rate
K)promissory note
L)maker 
A) accrued interest on notes payable 
B) time 
C) proceeds (note receivable) 
D) principal of the note 
E) notes payable register
F)credit advice
G)maturity value
H)discounting a note receivable
I)dishonored
J)effective rate
K)promissory note
L)maker

Question 9

From the information given below, determine the due date for the following notes:   Compute the amount of accrued interest on the following notes:   Compute the number of days from the issue date to the maturity date for the following notes:

Accepted Answer

The answer of From the information given below, determine the...

Question 10

When a business endorses a note and transfers it to a bank, the process is called

Accepted Answer

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

Question 11

Interest = Principal × Rate × Time.

Accepted Answer

A) True 
 B)False

Question 12

Match the terms with the definitions.
-The person or business agreeing to make the payment on a note.

Accepted Answer

A) accrued interest on notes payable 
B) time 
C) proceeds (note receivable) 
D) principal of the note 
E) notes payable register
F)credit advice
G)maturity value
H)discounting a note receivable
I)dishonored
J)effective rate
K)promissory note
L)maker 
A) accrued interest on notes payable 
B) time 
C) proceeds (note receivable) 
D) principal of the note 
E) notes payable register
F)credit advice
G)maturity value
H)discounting a note receivable
I)dishonored
J)effective rate
K)promissory note
L)maker

Question 13

A written promise to pay a specific sum of money at a definite future date is called a promissory note.

Accepted Answer

A) True 
 B)False

Question 14

A $6,700, 8.5% note is dated April 10 and is due in 75 days. The maturity value of the note would be

Accepted Answer

A)  $6,800.00. 
B)  $6,818.65. 
C)  $7,500.00. 
D)  $7,075.00. 
A)  $6,800.00. 
B)  $6,818.65. 
C)  $7,500.00. 
D)  $7,075.00.

Question 15

The face amount of a note that is promised to be paid at maturity is called the

Accepted Answer

A)  rate of interest. 
B)  principal of the note. 
C)  time of the note. 
D)  discount of the note. 
A)  rate of interest. 
B)  principal of the note. 
C)  time of the note. 
D)  discount of the note.

Question 16

Match the terms with the definitions.
-A potential liability that may become a real liability depending on future events.

Accepted Answer

A) term of the note 
B) accrued interest on notes receivable 
C) bank discount (note payable) 
D) bank discount (note receivable) 
E) contingent liability
F)rate of interest
G)discounting (note payable)
H)payee
I)notes receivable register
J)non-interest-bearing note
K)interest-bearing note 
A) term of the note 
B) accrued interest on notes receivable 
C) bank discount (note payable) 
D) bank discount (note receivable) 
E) contingent liability
F)rate of interest
G)discounting (note payable)
H)payee
I)notes receivable register
J)non-interest-bearing note
K)interest-bearing note

Question 17

An auxiliary record of notes receivable that provides detailed information about notes held by a business is known as a

Accepted Answer

A)  notes receivable register. 
B)  notes receivable worksheet. 
C)  notes receivable report. 
D)  schedule of notes receivable. 
A)  notes receivable register. 
B)  notes receivable worksheet. 
C)  notes receivable report. 
D)  schedule of notes receivable.

Question 18

Calculate interest using a 360-day year.

Accepted Answer

The answer of Calculate interest using a 360-day year. ...

Question 19

For notes payable issued in one period and due in the following period, accrued interest payable must be recorded at the end of the period.

Accepted Answer

A) True 
 B)False

Question 20

The total of the notes payable register should agree with the total of the notes receivable account in the general ledger.

Accepted Answer

A) True 
 B)False

Exam 17: Accounting for Notes and Interest

The proper entry to make when a note is paid at maturity depends on whether it is an interest-bearing or a non-interest-bearing note.

The interest due at maturity on a $489.52, 8% note, dated May 28 and due August 2 is

Match the terms with the definitions. -The procedure, which banks often use, of deducting interest in advance when making a loan.

In computing interest, it is customary to consider 360 days as a year.

The correct entry to make when a note is paid at maturity depends on whether the note is interest bearing or non-interest bearing.

The amount of interest on a 10% note of $600 dated May 7 and due July 18 would be $12.00.

The information contained in the notes receivable register normally is obtained from the general ledger accounts.

Match the terms with the definitions. -The interest amount paid divided by the proceeds received on a discounted note. This amount will differ from the stated rate on the face of the note.

From the information given below, determine the due date for the following notes: Compute the amount of accrued interest on the following notes: Compute the number of days from the issue date to the maturity date for the following notes:

When a business endorses a note and transfers it to a bank, the process is called

Interest = Principal × Rate × Time.

Match the terms with the definitions. -The person or business agreeing to make the payment on a note.

A written promise to pay a specific sum of money at a definite future date is called a promissory note.

A $6,700, 8.5% note is dated April 10 and is due in 75 days. The maturity value of the note would be

The face amount of a note that is promised to be paid at maturity is called the

Match the terms with the definitions. -A potential liability that may become a real liability depending on future events.

An auxiliary record of notes receivable that provides detailed information about notes held by a business is known as a

Calculate interest using a 360-day year.

For notes payable issued in one period and due in the following period, accrued interest payable must be recorded at the end of the period.

The total of the notes payable register should agree with the total of the notes receivable account in the general ledger.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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