Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 registerF) credit adviceG) maturity valueH) discounting a note receivableI) dishonoredJ) effective rateK) promissory noteL) maker

Question 4

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 5

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.

Question 6

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 7

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.

Question 8

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 9

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 10

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 registerF) credit adviceG) maturity valueH) discounting a note receivableI) dishonoredJ) effective rateK) promissory noteL) maker

Question 11

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

Question 12

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 13

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 liabilityF) rate of interestG) discounting (note payable) H) payeeI) notes receivable registerJ) non-interest-bearing noteK) interest-bearing note

Question 14

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.

Question 15

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.

Question 16

Interest = Principal × Rate × Time.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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.

Question 19

Calculate interest using a 360-day year.

Accepted Answer

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

Question 20

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 liabilityF) rate of interestG) discounting (note payable) H) payeeI) notes receivable registerJ) non-interest-bearing noteK) interest-bearing note

Exam 17: Accounting for Notes and Interest

Calculate interest using a 360-day year.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Interest = Principal × Rate × Time.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified