4. Which of the following statements about promissory notes is incorrect? a. Interest is the revenue to the maker of the note b. The party making the promise to pay is the debtor c. The party to whom payment is to be made is the creditor d. The maturity date of the note is the date when final payment of the note is due

4. Which of the following statements about promissory notes is incorrect? a. Interest is the revenue to the maker of the note b. The party making the promise to pay is the debtor c. The party to whom payment is to be made is the creditor d. The maturity date of the note is the date when final payment of the note is due

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Analyze the truth of this statement: Unlike bonds each installment note payment includes payment of a portion of the amount initially borrowed and payment of the interest on the outstanding balance. Group of answer choices This statement is true. This statement is false. There is not enough information to determine the truth of this statement. This statement does not apply to installment notes.
Access the FASB Accounting Standards Codification at the FASB website ( www.fasb.org ). Determine the specific citation for accounting for each of the following items: 1. Disclosure requirements for maturities of long-term debt. 2. How to estimate the value of a note when a note having no ready market and no interest rate is exchanged for a noncash asset without a readily available fair value. 3. When the straight-line method can be used as an alternative to the interest method of determining interest.
Discounting is a transfer or endorsement of a promissory note by the payee in favor of another party usually a bank where the payee becomes the endorsee TRUE OR FALSE
____________ to a Notes Payable or a Mortgages Payable account generally represent payments in full or in installments. The auditors should examine these payments; in so doing, they also will account for payments of accrued interest.
18. IDENTIFICATION. This refers to a sale of a single of multiple receivables to any financing institution at a discount. 19. TRUE OR FALSE. The proceeds from discounting is computed by deducting the discount from the carrying value of the notes receivable.
Face value of a note payable plus interest is called Omaturity value. O face value. O proceeds. Oprincipal.
1. Distinguish between a current liability and a long-term debt. 2. Why is the liabilities section of the balance sheet of primary significance to bankers? 3. What is the nature of a discount on notes payable? 4. Under what conditions must an employer accrue a liability for the cost of compensated absences? 5. Under what conditions should short-term obligation be excluded from current liabilities? 5.
If a bill of exchange is discounted and on the date of maturity such bill of exchange was dishonored by the acceptor, what will the bank do to collect such amount?
Which of the following statements is correct? O There is no interest included in a zero-interest-bearing note. O A long-term note's fair value and present value are always the same. O A note is signed by the payee in favour of the maker. O All notes contain an interest element because of the time value of money.
When loans are obtained from the bank or lending institutions, the accounts receivable may be pledged as collateral security for the payment of the loans requiring no entry nor disclosure with respect to pledged accounts in the books of the borrower TRUE OR FALSE
26) The cash payment or PMT for a Note Payable (installment loan) includes only interest on the loan. TRUE FALSE
a contract that is negotiated direclty between a borrowing firm and a bank and under which the borrower agrees to make a series of interest and principal payments to the bank on specific dates is called: