Question 1

The journal entry to record the payment of a discounted note at maturity is a debit to Notes Payable and Interest Expense,and a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 2

The adjusting entry for accrued interest on a notes receivable includes:

Accepted Answer

A) a debit to Interest Expense; a credit to Interest Revenue. 
B) a debit to Accrued Interest Receivable; a credit to Interest Revenue. 
C) a debit to Interest Revenue; a credit to Accrued Interest Payable. 
D) a debit to Accrued Interest Receivable; a credit to Interest Payable. 
A) a debit to Interest Expense; a credit to Interest Revenue. 
B) a debit to Accrued Interest Receivable; a credit to Interest Revenue. 
C) a debit to Interest Revenue; a credit to Accrued Interest Payable. 
D) a debit to Accrued Interest Receivable; a credit to Interest Payable.

Question 3

Mountain Site discounts a customer's 12%,$6,000,90-day note dated July 1,on August The discount period is 45 days,and the bank discount rate is 18%.The maturity value of the note is $6,180.The bank discount is $139.The proceeds of the note are:

Accepted Answer

A) $6,041. 
B) $6,319. 
C) $5,861. 
D) $6,139. 
A) $6,041. 
B) $6,319. 
C) $5,861. 
D) $6,139.

Question 4

Prepare general journal entries for the Knapp Computers Company for the following transactions:

Accepted Answer

The answer of Prepare general journal entries for the Knapp...

Question 5

The discount period begins when the note is discounted and ends with the maturity date.

Accepted Answer

A) True 
 B)False

Question 6

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).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Notes payable } & & & & \
\hline
\end{array}$

Accepted Answer

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

Question 7

Purchased merchandise (perpetual),by issuing a note,would have which effect on the categories?

Accepted Answer

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

Question 8

Brooke Company grants James Decorating additional time to pay its past due account.James makes a written promise to pay Brooke the amount on a certain date.James records this transaction as follows:

Accepted Answer

A) debit Notes Receivable; credit Accounts Receivable. 
B) debit Cash; credit Accounts Receivable. 
C) debit Accounts Receivable; credit Notes Receivable. 
D) debit Accounts Payable; credit Notes Payable. 
A) debit Notes Receivable; credit Accounts Receivable. 
B) debit Cash; credit Accounts Receivable. 
C) debit Accounts Receivable; credit Notes Receivable. 
D) debit Accounts Payable; credit Notes Payable.

Question 9

James borrowed $550 from Tracy.James promised in writing that he would repay the money to Tracy on May 13,200x.At the time of the loan,Tracy records the transaction as a(n):

Accepted Answer

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

Question 10

Marble Company discounts a customer's 12%,$5,000,60-day note dated August 1,on August 16.The discount period is 45 days,and the bank discount rate is 15%.The maturity value of the note is $5,100.The bank discount is:

Accepted Answer

A) $95.62. 
B) $31.88. 
C) $769.78. 
D) $43.25. 
A) $95.62. 
B) $31.88. 
C) $769.78. 
D) $43.25.

Question 11

The accounting department forgot to adjust for interest on the note payable.This error would cause:

Accepted Answer

A) the period end assets to be understated. 
B) the period end liabilities to be understated. 
C) the period's net income to be understated. 
D) None of these answers are correct. 
A) the period end assets to be understated. 
B) the period end liabilities to be understated. 
C) the period's net income to be understated. 
D) None of these answers are correct.

Question 12

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 13

A $10,000,7% note is dated May 18 and is due in 90 days.Using a 360-day year,the maturity value would be:

Accepted Answer

A) $10,000. 
B) $10,700. 
C) $10,175. 
D) $10,525. 
A) $10,000. 
B) $10,700. 
C) $10,175. 
D) $10,525.

Question 14

On November 10,Twister Rides issued a 14%,90-day,$15,000 promissory note.Twister should record the payment of the note on the maturity day as:

Accepted Answer

A) debit Notes Payable $15,525; credit Cash $15,525. 
B) debit Notes Payable $15,000; debit Interest Payable $525; credit Cash $15,525. 
C) debit Notes Payable $15,000; debit Interest Expense $525; credit Cash $15,525. 
D) debit Notes Payable $15,000; credit Cash $15,000. 
A) debit Notes Payable $15,525; credit Cash $15,525. 
B) debit Notes Payable $15,000; debit Interest Payable $525; credit Cash $15,525. 
C) debit Notes Payable $15,000; debit Interest Expense $525; credit Cash $15,525. 
D) debit Notes Payable $15,000; credit Cash $15,000.

Question 15

The maturity date of a 60-day note dated April 5 is June 3.

Accepted Answer

A) True 
 B)False

Question 16

The maturity value for a $6500,88-day note at 9% interest is $153.

Accepted Answer

A) True 
 B)False

Question 17

The interest rate stated on a note for 90 days is:

Accepted Answer

A) stated on a daily basis. 
B) stated on a monthly. 
C) stated on an annual basis. 
D) indeterminable. 
A) stated on a daily basis. 
B) stated on a monthly. 
C) stated on an annual basis. 
D) indeterminable.

Question 18

Interest expense is on a merchandise company's income statement under the heading:

Accepted Answer

A) Daily Expenses. 
B) Operating Expenses. 
C) Borrowing Expenses. 
D) Other Expenses or Interest Expense. 
A) Daily Expenses. 
B) Operating Expenses. 
C) Borrowing Expenses. 
D) Other Expenses or Interest Expense.

Question 19

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 20

Given the following accounts:
[1]	Cash
[2]	Notes receivable
[3]	Accounts receivable
[4]	Interest receivable
[5]	Notes payable
[6]	Accounts payable
[7]	Interest payable
[8]	Discount on notes payable
[9] 	Interest expense
[10]	Interest income
[11]	Sales
Indicate the account(s) to be debited and credited to record the following transactions.
-Paying the principal plus accrued interest.
Debit ________ & ________ Credit ________ & ________

Accepted Answer

Debit 5 &

Exam 14: Notes Receivable and Notes Payable

The journal entry to record the payment of a discounted note at maturity is a debit to Notes Payable and Interest Expense,and a credit to Cash.

The adjusting entry for accrued interest on a notes receivable includes:

Mountain Site discounts a customer's 12%,$6,000,90-day note dated July 1,on August The discount period is 45 days,and the bank discount rate is 18%.The maturity value of the note is $6,180.The bank discount is $139.The proceeds of the note are:

Prepare general journal entries for the Knapp Computers Company for the following transactions:

The discount period begins when the note is discounted and ends with the maturity date.

Purchased merchandise (perpetual),by issuing a note,would have which effect on the categories?

Brooke Company grants James Decorating additional time to pay its past due account.James makes a written promise to pay Brooke the amount on a certain date.James records this transaction as follows:

James borrowed $550 from Tracy.James promised in writing that he would repay the money to Tracy on May 13,200x.At the time of the loan,Tracy records the transaction as a(n):

Marble Company discounts a customer's 12%,$5,000,60-day note dated August 1,on August 16.The discount period is 45 days,and the bank discount rate is 15%.The maturity value of the note is $5,100.The bank discount is:

The accounting department forgot to adjust for interest on the note payable.This error would cause:

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

A $10,000,7% note is dated May 18 and is due in 90 days.Using a 360-day year,the maturity value would be:

On November 10,Twister Rides issued a 14%,90-day,$15,000 promissory note.Twister should record the payment of the note on the maturity day as:

The maturity date of a 60-day note dated April 5 is June 3.

The maturity value for a $6500,88-day note at 9% interest is $153.

The interest rate stated on a note for 90 days is:

Interest expense is on a merchandise company's income statement under the heading:

Tricia's Decor purchased merchandise from House Beautiful and issued a promissory note.Tricia should record the transaction 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: The Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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