Mod 13A Wrong Answers Flashcards
In recording the transaction recognition where a note receivable is issued with a related merchandise discount, what should be recorded?
Discount on note receivable should be recorded
Deferred charge should be recorded
What should be used to record the amount of the purchased machine, where a one time lump sum payment is made, assuming a 10% interest rate?
Cost of machine x present value of $1
The total interest revenue earned over the life of the note equals…
The excess of cash received over the cash paid to acquire the
Note
Discount on notes payable, classification
Liability valuation account
Discount on notes payable should be recorded on the balance sheet as…
A direct reduction from the face amount of the note
A premium on notes payable would be reported on the balance sheet as…
An addition to face amount on the note
The discount on notes receivable is not a Deferred credit separate form the note because it is…
A debit
When a note is issued with a stated rate of 8% below the market rate of 10%, the note will be issued…
At a discount
