Accounting 1- test 2

The basic issues in accounting for notes receivable include each of the following except

analyzing notes receivable.

Trade accounts receivable are valued and reported on the balance sheet

at net realizable value

The two key parties to a promissory note are the

maker and the payee

Which of the following receivables would not be classified as an "other receivable"?

note recievable

Receivables are frequently classified as

accounts receivable, notes receivable, and other receivables

A promissory note

may be used to settle an accounts receivable

The receivable that is usually evidenced by a formal instrument of credit is a(n)

note receivable.

Interest is usually associated with

notes receivable

Claims for which formal instruments of credit are issued as proof of the debt are

notes receivable.

A seller may encourage early payment by

offering a discount for early payment.

Three accounting issues associated with accounts receivable are

recognizing, valuing, and disposing.

A cash discount is usually granted to all of the following except

retail customers.

The interest on a $9000, 8%, 1-year note receivable is

720

The maturity value of a $6500, 6%, 60-day note receivable dated February 10th is

6,565

The interest on a $6500, 6%, 60-day note receivable is

65

Which of the following are also called trade receivables?

Accounts receivable

A 90-day note dated May 18 has a maturity date of

August 16.

A 30-day note dated June 13 has a maturity date of

July 13.

Which of the following practices by a credit card company results in lower interest charges to the cardholder?

The card company allows a grace period before interest is accrued.

Which of the following would require a compound journal entry?

To record collection of accounts receivable when a cash discount is taken.

The term "receivables" refers to

amounts due from individuals or companies

Notes receivable are recognized in the accounts at

face value

When a note is accepted to settle an open account, Notes Receivable is debited for the note's

face value

the face value of a note refers to the amount

that is identified on the formal instrument of credit

Notes or accounts receivables that result from sales transactions are often called

trade receivables.