Question : 14.2 Learning Objective 14-2 1) For the payee, being given additional : 1171057

Accounting

14.2 Learning Objective 14-2

1) For the payee, being given additional time to settle an account with issuance of a note results in a shift of:

A) assets from Notes Receivable to Accounts Receivable.

B) assets from Accounts Receivable to Notes Receivable.

C) liabilities from Notes Payable to Accounts Payable.

D) liabilities from Accounts Payable to Notes Payable.

2) When an interest-bearing note comes due and is uncollectible, the journal entry includes:

A) debiting Notes Receivable; crediting Accounts Receivable.

B) debiting Notes Receivable; crediting Accounts Receivable and Interest Revenue.

C) debiting Accounts Receivable; crediting Interest Revenue.

D) debiting Accounts Receivable; crediting Notes Receivable and Interest Revenue.

3) Martin Company needs additional time to pay its accounts payable to Boster Company. Martin makes a written promise to pay Boster the amount on a certain date. Martin records this transaction as follows:

A) debit Notes Payable; credit Accounts Payable.

B) debit Cash; credit Accounts Payable.

C) debit Accounts Payable; credit Notes Payable.

D) debit Notes Payable; credit Cash.

4) Brooke Company grants James Decorating additional time to pay its past due account. James makes a written promise to pay Brooke the amount on a certain date. Brooke Company records this transaction as follows:

A) debit Notes Receivable; credit Accounts Receivable.

B) debit Cash; credit Accounts Receivable.

C) debit Accounts Receivable; credit Notes Receivable.

D) debit Accounts Payable; credit Notes Payable.

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

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.

6) Cory issued a note to his creditor in exchange for an account. Cory records the transaction as follows:

A) debit Notes Payable; credit Accounts Payable.

B) debit Notes Receivable; credit Accounts Receivable.

C) debit Accounts Payable; credit Notes Payable.

D) debit Accounts Receivable; credit Notes Payable.

7) If a company does not pay its note payable on the agreed upon date, the note:

A) is renewed automatically for the same period of time.

B) is discounted at a higher rate of interest.

C) is dishonored by the vendor.

D) is automatically placed in collection with an outside agency.

8) On November 10, Twister Rides issued a 12%, 60-day, $10,000 promissory note. Twister should record the payment of the note on the maturity day as:

A) debit Notes Payable $10,200; credit Cash $10,200.

B) debit Notes Payable $10,000; debit Interest Expense $200; credit Cash $10,200.

C) debit Notes Payable $10,000; debit Interest Payable $200; credit Cash $10,200.

D) debit Notes Payable $10,000; credit Cash $10,000.

9) Straight Company sold merchandise to Cross Company and received a promissory note from Cross. Straight should record the transaction as:

A) debit Notes Receivable and credit Sales for the principal amount of the note.

B) debit Notes Receivable and credit Sales for the maturity value of the note.

C) debit Accounts Receivable and credit Sales for the maturity amount of the note.

D) debit Accounts Receivable and credit Sales for the principal amount of the note.

10) Tricia’s Decor purchased merchandise from House Beautiful and issued a promissory note. Tricia should record the transaction as:

A) debit Purchases and credit Notes Payable for the principal amount of the note.

B) debit Purchases and credit Notes Payable for the maturity value of the note.

C) debit Purchases and credit Accounts Payable for the face amount of the note.

D) debit Purchases and credit Accounts Payable for the maturity value of the note.

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July 1, 2023

61.When there is a shortage in a market, prices are likely to:

A. Fall because buyers do not wish to buy as much as sellers want to sell.

B. Rise because some buyers will offer to pay a higher price.

C. Fall because sellers are likely to reduce their production if prices rise.

D. Rise because the government will put a price ceiling in place.

62.If a market shortage exists:

A. The invisible hand will work to reduce the price.

B. The only solution is for the government to raise the price.

C. Producers will compete for customers by reducing prices.

D. Consumers will compete for the product by offering to pay more.

63.A market surplus occurs when:

A. People cannot buy the amount of goods and services that they are willing and able to buy.

B. The price is less than the equilibrium price.

C. The quantity supplied exceeds the quantity demanded at a given price.

D. There is a price ceiling.

64.When there is a surplus in a market, prices are likely to fall because:

A. Buyers do not wish to buy as much as sellers want to sell.

B. Some buyers will offer to pay a higher price, initiating a move up the supply curve.

C. Sellers are likely to increase their production.

D. Buyers will wait for the government to establish a price floor.

65.If a market surplus exists:

A. The only resolution is for the government to set the price.

B. Consumers will compete for the product buy offering to pay more.

C. Producers will compete for customers by reducing prices.

D. The equilibrium price is equal to the price ceiling.

66.If demand is constant, a decrease in the supply of gasoline will cause the equilibrium price:

A. To rise and quantity to fall.

B. And quantity both to rise.

C. To fall and quantity to rise.

D. And quantity both to fall.

67.If demand is constant, a leftward shift in the supply curve will result in:

A. A decrease in equilibrium quantity and a lower equilibrium price.

B. An increase in equilibrium quantity and a lower equilibrium price.

C. A decrease in equilibrium quantity and a higher equilibrium price.

D. An increase in equilibrium quantity and a higher equilibrium price.

68.The price of chocolate candy bars rises. This could be due to:

A. A decrease in the wage rate paid to workers in the candy bar factories.

B. A decrease in the cost of chocolate, which is used to produce candy bars.

C. A subsidy by the federal government for the producers of chocolate candy bars.

D. A decrease in the number of chocolate candy bar producers.

69.If demand is unchanged, a rightward shift in the supply curve for plasma TVs will cause:

A. A decrease in equilibrium quantity and a higher equilibrium price.

B. An increase in equilibrium quantity and a higher equilibrium price.

C. An increase in equilibrium quantity and a lower equilibrium price.

D. A decrease in equilibrium quantity and a lower equilibrium price.

70.Which of the following would cause a decrease in the price of automobiles?

A. A technological advance in automobile manufacturing.

B. An increase in the wages paid to automobile assembly line workers.

C. A decrease in the cost of gasoline.

D. An increase in the number of buyers.