1. This is the criterion to determine whether the transfer is accounted for as borrowing. _______________ 2. What account to debit if the company pays a delinquent notes receivable that was previously discounted. _______________ 3. What account to credit if the customer’s notes receivable become delinquent and was not previously discounted. _______________ 4. When accounts receivable is factored, the accounts payable shall be credited. True or False? _______________ 5. The interest on a non-interest bearing note is equal to its discount amount. _______________ 6. The practice of realizing cash from accounts receivable before its maturity date is widespread. Defalcation is one of them. True or False? _______________ 7. A 120-day, 10% interest-bearing note receivable is sold to a bank with recourse after being held for 60 days. The proceeds are calculated using an 8% interest rate. In this situation, what happened to the notes receivable?
1. This is the criterion to determine whether the transfer is accounted for as
borrowing.
_______________ 2. What account to debit if the company pays a delinquent notes receivable that
was previously discounted.
_______________ 3. What account to credit if the customer’s notes receivable become delinquent
and was not previously discounted.
_______________ 4. When
True or False?
_______________ 5. The interest on a non-interest bearing note is equal to its discount amount.
_______________ 6. The practice of realizing cash from accounts receivable before its maturity date
is widespread. Defalcation is one of them. True or False?
_______________ 7. A 120-day, 10% interest-bearing note receivable is sold to a bank with recourse
after being held for 60 days. The proceeds are calculated using an 8% interest rate. In this situation,
what happened to the notes receivable?
_______________ 8. On January 1, an entity received a one-year note receivable bearing interest at
the market rate. The face value of the note receivable and the entire interest are due in one year.
When the note receivable was recorded on January 1, the Interest receivable is debited. True or False?
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