FAR — Financial Accounting & Reporting — Quiz 38

Questions in this quiz (10)

1. Which of the following best describes the maturity date of a note?

   • The date the note is issued
   • The date interest is calculated
   • The date the note must be repaid
   • The date revenue is recorded

2. Which financial statement reports interest revenue from notes receivable?

   • Balance sheet
   • Income statement
   • Statement of retained earnings
   • Statement of cash flows

3. Which of the following increases interest revenue?

   • Issuing a note receivable
   • Accruing interest earned
   • Writing off receivables
   • Recording depreciation

4. Which account is classified as a current asset if due within one year?

   • Notes receivable
   • Equipment
   • Accounts payable
   • Long-term investments

5. Which journal entry records collection of a note receivable plus interest?

   • Debit Cash; Credit Notes Receivable and Interest Revenue
   • Debit Notes Receivable; Credit Cash
   • Debit Interest Expense; Credit Cash
   • Debit Revenue; Credit Cash

6. Which of the following represents the principal of a note?

   • Interest amount
   • Original amount borrowed
   • Maturity value
   • Interest rate

7. Which term describes the total amount paid at maturity?

   • Principal value
   • Interest amount
   • Maturity value
   • Carrying value

8. Which event converts accounts receivable into a note receivable?

   • Customer payment
   • Customer signing a promissory note
   • Recording revenue
   • Writing off receivable

9. Which account is credited when converting accounts receivable into a note receivable?

   • Notes receivable
   • Accounts receivable
   • Cash
   • Interest revenue

10. Which financial statement reports notes receivable?

    • Balance sheet
    • Income statement
    • Statement of cash flows
    • Statement of retained earnings