Question 1

Bill's Bikes discounts a 90-day, 8%, $4,000 note at a bank at 12%. The discount period is 50 days. It records the proceeds as:

Accepted Answer

A)  debit Cash $4,012; credit Notes Receivable $4,000; credit Interest Income $12.
B)  debit Cash $4,160; credit Notes Receivable $4,080; credit Interest Income $80.
C)  debit Cash $4,068, credit Notes Receivable $4,000; credit Interest Income $68.
D)  debit Cash $4,012; credit Notes Receivable $4,000, credit Interest Expense $12.

Question 2

Jeff Company issues a promissory note to David Company to get extended time on an account payable. David records this transaction as follows:

Accepted Answer

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

Question 3

The maturity date for a 60-day note dated February 10, 2012, a leap year is:

Accepted Answer

A)  February 10.
B)  April 10.
C)  April 11.
D)  April 9.

Question 4

A promissory note from the sales of merchandise 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 are correct.

Question 5

Sold merchandise on account would have which effect on the following categories?

Accepted Answer

A)  Total Accounts Receivable would increase.
B)  Total revenues would be increased.
C)  Total liabilities would not be affected.
D)  A and B would definitely occur.

Question 6

If your customer does not pay the note at maturity, the journal entry on your books would be:

Accepted Answer

A)  debit Notes Payable and credit Accounts Payable.
B)  debit Accounts Payable, credit Interest Income and credit Notes Payable.
C)  debit Accounts Receivable, credit Interest Income and credit Notes Receivable.
D)  debit Notes Receivable, credit Interest Income, and credit Accounts Receivable.

Question 7

The maturity date for a four-month note dated January 31 is:

Accepted Answer

A)  May 1.
B)  April 30.
C)  May 31.
D)  April 29.

Question 8

Using a 360-day year, interest calculated for 180 days on a $7,000, 9% promissory note is:

Accepted Answer

A)  $630.
B)  $310.
C)  $315.
D)  some other amount.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Describe (a)the function of a promissory note and (b)explain its various parts and features.

Accepted Answer

a)
A promissory note is a written promis...

Question 11

Given the following accounts:
  Indicate the account(s)to be debited and credited to record the following transactions.
-A promissory note received in granting a time extension to a charge customer.
Debit ________ & ________ Credit ________ & ________

Accepted Answer

The answer of Given the following accounts:
  Indicate the...

Question 12

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.

Question 13

Accrued interest resulting from a trade note receivable would have which effect on the categories?

Accepted Answer

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

Question 14

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).
-

Accepted Answer

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

Question 15

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.

Question 16

Paying the principal 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.

Question 17

The entry to record the cash received on a note discounted at less than face value is to:

Accepted Answer

A)  debit Cash, credit Interest Income, and credit Notes Receivable.
B)  debit Cash, debit Interest Expense, and credit Notes Receivable.
C)  debit Cash and credit Interest Expense.
D)  debit Notes Receivable and credit Cash.

Question 18

The maturity date for a 66-day note dated June 29 is:

Accepted Answer

A)  September 1.
B)  September 2.
C)  September 3.
D)  August 31.

Question 19

Prepare general journal entries for Huckabee Corporation for the following transactions:
200x
  200x

Accepted Answer

The answer of Prepare general journal entries for Huckabee Corporation...

Question 20

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).
-

Accepted Answer

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

Exam 14: Notes Receivable and Notes Payable

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

Correct AnswerverifiedShow Answer

Accrued interest resulting from a trade note receivable would have which effect on the categories?

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

The entry to record the cash received on a note discounted at less than face value is to:

Correct AnswerverifiedShow Answer

Using a 360-day year, interest calculated for 180 days on a $7,000, 9% promissory note is:

Correct AnswerverifiedShow Answer

The maturity date for a four-month note dated January 31 is:

Correct AnswerverifiedShow Answer

Describe (a)the function of a promissory note and (b)explain its various parts and features.

Correct Answerverifieda)A promissory note is a written promis...View AnswerShow Answer

Prepare general journal entries for Huckabee Corporation for the following transactions: 200x 200x

Correct AnswerverifiedShow Answer

Jeff Company issues a promissory note to David Company to get extended time on an account payable. David records this transaction as follows:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Bill's Bikes discounts a 90-day, 8%, $4,000 note at a bank at 12%. The discount period is 50 days. It records the proceeds as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The maturity date for a 60-day note dated February 10, 2012, a leap year is:

Correct AnswerverifiedShow Answer

The maturity date for a 66-day note dated June 29 is:

Correct AnswerverifiedShow Answer

Sold merchandise on account would have which effect on the following categories?

Correct AnswerverifiedShow Answer

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). -

Correct AnswerverifiedShow Answer

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). -

Correct AnswerverifiedShow Answer

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -A promissory note received in granting a time extension to a charge customer. Debit ________ & ________ Credit ________ & ________

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If your customer does not pay the note at maturity, the journal entry on your books would be:

Correct AnswerverifiedShow Answer

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a)
A promissory note is a written promis...
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Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -A promissory note received in granting a time extension to a charge customer. Debit & Credit &

Correct Answer
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