Question : 59.Notes payable due within one year usually shown in the A. Current : 1169008

 

 

59.Notes payable due within one year are usually shown in the   

A. Current Assets section of the balance sheet.

 

B. Current Liabilities section of the balance sheet.

 

C. Other Expenses section of the income statement.

 

D. Long-Term Liabilities section of the balance sheet.

 

 

 

 

60.Upon collection of the amount due on a $6,000 face value, 90-day note with interest at 10 percent a year, the Note Receivable account is   

A. debited for $6,600.

 

B. credited for $6,000.

 

C. credited for $6,150.

 

D. debited for $6,000.

 

 

 

 

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

A. Allowance for Doubtful Accounts should immediately be debited.

 

B. the note is said to be dishonored.

 

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.

 

 

 

 

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

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.

 

 

 

 

63.The Jiminez Company accepted an interest-bearing note to settle a past-due account originating from a sale of merchandise. When the note is collected, the interest earned should be credited to   

A. Interest Income.

 

B. Sales.

 

C. Allowance for Doubtful Accounts.

 

D. Notes Receivable.

 

 

 

 

64.The Interest Income account   

A. usually has a credit balance.

 

B. is usually shown in the Current Assets section of the balance sheet.

 

C. is debited when the firm records the effects of a dishonored note receivable.

 

D. is credited when the firm accepts a note receivable from a customer.

 

 

 

 

65.A 60-day note dated April 1 was turned over to the bank for discounting on April 21. The number of days used in computing the dollar amount of the discount is   

A. 20.

 

B. 40.

 

C. 60.

 

D. 30.

 

 

 

66.The Notes Receivable Discounted account   

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.

 

 

 

 

67.The Notes Receivable Discounted account   

A. is shown as a deduction from Notes Receivable on the balance sheet.

 

B. is a contra asset.

 

C. is used to acknowledge the contingent liability associated with a note.

 

D. all of these statements.

 

 

 

 

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

A. interest receivable.

 

B. interest expense.

 

C. notes receivable discounted.

 

D. interest income.

 

 

69.Which of the following statements is not correct?   

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.