A note that the maker fails to pay on the due date is referred to asdiscounted note.expected credit loss note.dishonored note.disappointed note. Assume that a company records purchases net of discount. If the company bought merchandise valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the purchase within the discount period would include a debit toAccounts Payable for ₱4,850 and a credit to Cash for ₱4,850.Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000. A note that the maker fails to pay on the due date is referred to asdiscounted note.expected credit loss note.dishonored note.disappointed note. Assume that a company records purchases net of discount. If the company bought merchandise valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the purchase within the discount period would include a debit toAccounts Payable for ₱4,850 and a credit to Cash for ₱4,850.Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000. An entity’s assets include the following. Which is not a debt security?Convertible bondsCommercial paperLoans receivableAll of these are debt securities.An increase in the cash surrender value is accounted for asincome recognized in profit or loss.income recognized in other comprehensive income.reduction to insurance expense.none of these.

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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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A note that the maker fails to pay on the due date is referred to as
1. discounted note.
2. expected credit loss note.
3. dishonored note.
4. disappointed note.

Assume that a company records purchases net of discount. If the company bought merchandise valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the purchase within the discount period would include a debit to
1. Accounts Payable for ₱4,850 and a credit to Cash for ₱4,850.
2. Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.
3. Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.
4. Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000.

1. A note that the maker fails to pay on the due date is referred to as
  1. discounted note.
  2. expected credit loss note.
  3. dishonored note.
  4. disappointed note.
1. Assume that a company records purchases net of discount. If the company bought merchandise valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the purchase within the discount period would include a debit to
  1. Accounts Payable for ₱4,850 and a credit to Cash for ₱4,850.
  2. Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.
  3. Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.
  4. Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000.
1. An entity’s assets include the following. Which is not a debt security?
  1. Convertible bonds
  2. Commercial paper
  3. Loans receivable
  4. All of these are debt securities.
2. An increase in the cash surrender value is accounted for as
  1. income recognized in profit or loss.
  2. income recognized in other comprehensive income.
  3. reduction to insurance expense.
  4. none of these.

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