Question 1

The Notes Receivable Discounted account

Accepted Answer

A) has a debit balance. 
B) is shown as a deduction from Notes Receivable on the balance sheet. 
C) is used to record the amounts due on dishonored notes. 
D) is used to record the amount of interest deducted by the bank when a note is discounted. 
A) has a debit balance. 
B) is shown as a deduction from Notes Receivable on the balance sheet. 
C) is used to record the amounts due on dishonored notes. 
D) is used to record the amount of interest deducted by the bank when a note is discounted.

Question 2

Which of the following statements is correct?

Accepted Answer

A) To be considered a negotiable instrument, a promissory note must specify an interest rate. 
B) The amount stated on a note is called the face value. 
C) A company that issued a 6-month note payable would report its face value on the balance sheet as a long-term liability. 
D) A note payable must be payable at a specific time in the future. 
A) To be considered a negotiable instrument, a promissory note must specify an interest rate. 
B) The amount stated on a note is called the face value. 
C) A company that issued a 6-month note payable would report its face value on the balance sheet as a long-term liability. 
D) A note payable must be payable at a specific time in the future.

Question 3

When a note payable is-------- , the lender deducts interest on the loan in advance and the borrower receives only the difference between the face amount of the note and the interest on it to maturity.

Accepted Answer

The answer of When a note payable is-------- , the...

Question 4

If the amount of a note receivable is not collected at maturity, the accountant should debit Uncollectible Accounts Expense and credit Notes Receivable.

Accepted Answer

A) True 
 B)False

Question 5

Compute the maturity value of a 180-day, 9 percent note with a face value of $11,000.

Accepted Answer

The answer of Compute the maturity value of a 180-day,...

Question 6

If the proceeds of a discounted note are less than the face amount, the difference is debited to Interest Expense.

Accepted Answer

A) True 
 B)False

Question 7

Compute the amount of interest owed on a 180-day, 10 percent note for $10,000.

Accepted Answer

The answer of Compute the amount of interest owed on...

Question 8

The due date of a one-month note dated October 11, is November

Accepted Answer

A) 11. 
B) 12. 
C) 13. 
D) 14. 
A) 11. 
B) 12. 
C) 13. 
D) 14.

Question 9

If the amount due on a note receivable is not collected at maturity,

Accepted Answer

A) Allowance for Doubtful Accounts should immediately be credited. 
B) Uncollectible Accounts Expense should be debited. 
C) the face value of the note should continue to be carried in the Notes Receivable account until all possible means of collecting the note have been exhausted. 
D) Accounts Receivable is debited for the maturity value. 
A) Allowance for Doubtful Accounts should immediately be credited. 
B) Uncollectible Accounts Expense should be debited. 
C) the face value of the note should continue to be carried in the Notes Receivable account until all possible means of collecting the note have been exhausted. 
D) Accounts Receivable is debited for the maturity value.

Question 10

Find the due date of a 90-day note issued on June 6, 2019.

Accepted Answer

The answer of Find the due date of a 90-day...

Question 11

Find the due date of a 30-day note issued on November 10, 2019.

Accepted Answer

The answer of Find the due date of a 30-day...

Question 12

Find the due date of a 3-month note issued on September 12, 2019.

Accepted Answer

The answer of Find the due date of a 3-month...

Question 13

Since notes receivable are negotiable, internal control procedures must be devised to protect them against fraud and theft.

Accepted Answer

A) True 
 B)False

Question 14

Compute the maturity value of an 8-month, 12 percent note with a face value of $12,000.

Accepted Answer

The answer of Compute the maturity value of an 8-month,...

Question 15

Match between columns
                        Premises: A 360-day period used to calculate interest on a note
A financial document containing a promise or order to pay that meets all requirements of the Uniform Commercial Code in order to be transferable to another party
Deducting the interest from the principal on a note payable or receivable in advance
An amount of money indicated to be paid, exclusive of interest or discounts
A written order that requires one party (a person or business)to pay a stated sum of money t another party
The fee charged for the use of money
A commercial draft that is payable during a specified period of time
An item that can become a liability if certain things happen
The amount shown on the face of a note
A draft on the issuing bank's own funds
A check written by a bank that orders another bank to pay the stated amount to a specific party
A business document that lists goods accepted for transportation
A commercial draft that is payable on presentation
A form of commercial time draft used in transactions involving the sale of goods
The total amount (principal plus interest)that must be paid when a note comes due
A note issued by one party that orders another party to pay a specified sum on a specified da
A liability representing a written promise by the maker of the note (the debtor)to pay anoth party (the creditor)a specified amount at a specified future date
An asset representing a written promise by another party (the debtor)to pay the note holder (the creditor)a specified amount at a specified future date

Accepted Answer

The Answer of Maturity value and Face value and Trade is...

Question 16

An ordinary check is one form of a draft.

Accepted Answer

A) True 
 B)False

Question 17

The journal entry to record the payment of the amount due on a $4,000 face value, 60-day, 6 percent note, would include a debit to Notes Payable for $4,000.

Accepted Answer

A) True 
 B)False

Question 18

A firm purchased equipment for $49,000 paying $19,000 cash at issued a 6%, 90-day note for the remaining balance. The journal entry to record the payment of the note at maturity is

Accepted Answer

A) debit Equipment for $49,000; credit Cash $19,000 and credit Notes Payable for $30,000. 
B) debit Notes Payable for $30,000 and credit Cash for $30,000. 
C) debit Notes Payable for $30,000 and debit Interest Expense for $450 and credit Cash for
$30,450. 
D) debit Notes Payable for $49,000 and debit Interest Expense for $735 and credit Cash for
$49,735. 
A) debit Equipment for $49,000; credit Cash $19,000 and credit Notes Payable for $30,000. 
B) debit Notes Payable for $30,000 and credit Cash for $30,000. 
C) debit Notes Payable for $30,000 and debit Interest Expense for $450 and credit Cash for
$30,450. 
D) debit Notes Payable for $49,000 and debit Interest Expense for $735 and credit Cash for
$49,735.

Question 19

The entry to record the issuance of a promissory note will include a----------- to Notes Payable.

Accepted Answer

The answer of The entry to record the issuance of...

Question 20

The Notes Receivable Discounted account

Accepted Answer

A) is shown as a deduction from Notes Receivable on the balance sheet. 
B) is a contra asset. 
C) is used to acknowledge the contingent liability associated with a note. 
D) All of the choices are correct. 
A) is shown as a deduction from Notes Receivable on the balance sheet. 
B) is a contra asset. 
C) is used to acknowledge the contingent liability associated with a note. 
D) All of the choices are correct.

Exam 16: Notes Payable and Notes Receivable

The Notes Receivable Discounted account

Which of the following statements is correct?

When a note payable is-------- , the lender deducts interest on the loan in advance and the borrower receives only the difference between the face amount of the note and the interest on it to maturity.

If the amount of a note receivable is not collected at maturity, the accountant should debit Uncollectible Accounts Expense and credit Notes Receivable.

Compute the maturity value of a 180-day, 9 percent note with a face value of $11,000.

If the proceeds of a discounted note are less than the face amount, the difference is debited to Interest Expense.

Compute the amount of interest owed on a 180-day, 10 percent note for $10,000.

The due date of a one-month note dated October 11, is November

If the amount due on a note receivable is not collected at maturity,

Find the due date of a 90-day note issued on June 6, 2019.

Find the due date of a 30-day note issued on November 10, 2019.

Find the due date of a 3-month note issued on September 12, 2019.

Since notes receivable are negotiable, internal control procedures must be devised to protect them against fraud and theft.

Compute the maturity value of an 8-month, 12 percent note with a face value of $12,000.

An ordinary check is one form of a draft.

The journal entry to record the payment of the amount due on a $4,000 face value, 60-day, 6 percent note, would include a debit to Notes Payable for $4,000.

A firm purchased equipment for $49,000 paying $19,000 cash at issued a 6%, 90-day note for the remaining balance. The journal entry to record the payment of the note at maturity is

The entry to record the issuance of a promissory note will include a----------- to Notes Payable.

The Notes Receivable Discounted account

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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