Question 1

If the proceeds of a note discounted at a bank are greater than the face value of the note,the difference is recognized as

Accepted Answer

A)   interest receivable.
B)   interest expense.
C)   notes receivable discounted.
D)   interest income.E) All of the above
F) B) and C)

Question 2

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)   Accounts Receivable is debited for the maturity value.
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)   Uncollectible Accounts Expense should be debited.E) A) and B)
F) A) and C)

Question 3

A(n)____________________ is a written order that requires the person or business addressed to pay a stated sum of money to another person or firm.

Accepted Answer

The answer of A(n)____________________ is a written order that requires...

Question 4

The amount of cash paid at the maturity date on a $12,000 face value,90-day note bearing interest at 10 percent is

Accepted Answer

A)   $1,200.
B)   $12,000.
C)   $300.
D)   $12,300.E) B) and D)
F) A) and B)

Question 5

A dishonored note is converted to Accounts Receivable at its face value.

Accepted Answer

A) True 
 B)False

Question 6

Compute the amount of interest owed on a 60-day,8 percent note for $9,000.

Accepted Answer

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

Question 7

Sight drafts may be used to collect past-due accounts receivables or to obtain cash on delivery when shipments are made to new customers or customers with poor credit.

Accepted Answer

A) True 
 B)False

Question 8

Compute the maturity value of a 60-day,7 percent note with a face value of $6,000.

Accepted Answer

The answer of Compute the maturity value of a 60-day,7...

Question 9

Find the due date of a 90-day note issued on June 6,2013.

Accepted Answer

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

Question 10

If a note payable overlaps financial reporting periods (years),Interest Expense is recorded only in the year the note is paid.

Accepted Answer

A) True 
 B)False

Question 11

The Woo Corporation had the following transactions involving notes payable during 2013.Record the transactions on page 8 of a general journal.Omit descriptions.

Accepted Answer

The answer of The Woo Corporation had the following transactions...

Question 12

Compute the maturity value of a 180-day,6 percent note with a face value of $1,000.

Accepted Answer

The answer of Compute the maturity value of a 180-day,6...

Question 13

Which of the following statements is not correct?

Accepted Answer

A)   When a note receivable is discounted,the proceeds are computed by subtracting the discount from the maturity value of the note.
B)   The entry to record the discounting of a note receivable may result in the recognition of interest expense.
C)   When a note is discounted at a bank,the proceeds are always less than the maturity value of the note.
D)   When a note receivable is discounted at a bank,the entry to record the transaction includes a debit to cash.E) None of the above
F) A) and D)

Question 14

The Martinez Company,had the following transactions involving notes payable during 2013.Record the transactions on page 11 of a general journal.Omit descriptions.

Accepted Answer

The answer of The Martinez Company,had the following transactions involving...

Question 15

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 16

Compute the maturity value of a 30-day,8 percent note with a face value of $6,000.

Accepted Answer

The answer of Compute the maturity value of a 30-day,8...

Question 17

The Notes Receivable Discounted account

Accepted Answer

A)   is shown as a deduction from Notes Receivable on the balance sheet.
B)   has a debit balance.
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.E) B) and C)
F) A) and C)

Question 18

To obtain cash on delivery,goods may be shipped with a sight draft attached to a(n)___________________.

Accepted Answer

The answer of To obtain cash on delivery,goods may be...

Question 19

The maturity value of a 60-day note for $6,000 that bears interest at 6 percent a year is

Accepted Answer

A)   $6,060.
B)   $6,600.
C)   $6,000.
D)   $5,940.E) B) and D)
F) B) and C)

Question 20

The Interest Expense account usually has a credit balance.

Accepted Answer

A) True 
 B)False

Exam 16: Notes Payable and Notes Receivable

The Notes Receivable Discounted account

Correct AnswerverifiedShow Answer

Compute the maturity value of a 180-day,6 percent note with a face value of $1,000.

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The Martinez Company,had the following transactions involving notes payable during 2013.Record the transactions on page 11 of a general journal.Omit descriptions.

Correct AnswerverifiedShow Answer

Sight drafts may be used to collect past-due accounts receivables or to obtain cash on delivery when shipments are made to new customers or customers with poor credit.

Correct AnswerverifiedShow Answer

The maturity value of a 60-day note for $6,000 that bears interest at 6 percent a year is

Correct AnswerverifiedShow Answer

The Woo Corporation had the following transactions involving notes payable during 2013.Record the transactions on page 8 of a general journal.Omit descriptions.

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Find the due date of a 90-day note issued on June 6,2013.

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A(n)____________________ is a written order that requires the person or business addressed to pay a stated sum of money to another person or firm.

Correct AnswerverifiedShow Answer

Compute the maturity value of a 30-day,8 percent note with a face value of $6,000.

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A dishonored note is converted to Accounts Receivable at its face value.

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Compute the amount of interest owed on a 60-day,8 percent note for $9,000.

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Compute the maturity value of a 60-day,7 percent note with a face value of $6,000.

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The amount of cash paid at the maturity date on a $12,000 face value,90-day note bearing interest at 10 percent is

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To obtain cash on delivery,goods may be shipped with a sight draft attached to a(n)___________________.

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If the proceeds of a note discounted at a bank are greater than the face value of the note,the difference is recognized as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a note payable overlaps financial reporting periods (years),Interest Expense is recorded only in the year the note is paid.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

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The Interest Expense account usually has a credit balance.

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