Adv. Accounting - Ch. 9 Review Question Preview (ID: 13134)
Notes Payable, Prepaid Expenses & Accrued Expenses.
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The original amount of a note is called the
a) rate of the note
b) term of the note
c) principal
d) maturity value
The interest accrued on money borrowed is called
a) interest expense
b) prepaid interest
c) interest revenue
d) interest receivable
A written & signed promise to pay a sum of money at a specified time is called a
a) secured note
b) promissory note
c) principal
d) loan document
The beginning balance of Supplies is $15,000, and the adjusting entry to record the supplies used is $10,000. The amount of supplies used during the fiscal period is $5,000.
a) True
b)
c)
d) False
Wilson, Inc. initially records supplies as an expense; therefore, it should record a reversing entry for supplies.
a) True
b)
c)
d) False
The accrual for federal income tax is recorded as an adjusting entry by debiting Federal Income Tax Payable and crediting Federal Income Tax Expense.
a) True
b)
c)
d) False
Supplies may be recorded initially as expenses or as assets.
a) True
b)
c)
d) False
When a note payable is repaid, the amount of cash paid equals the maturity value of the note.
a) True
b)
c)
d) False
If the principal of a 90-day note is $4,000 and the interest due at maturity is $100, the interest rate on the note is
a) 3%
b) 10%
c) 7%
d) 5%
If the term of a note is 6 months and the note is dated March 20, it is due
a) September 20
b) October 20
c) July 20
d) August 20
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