Adv. Accounting - Ch. 9 Review Question Preview (ID: 13143)

Notes Payable, Prepaid Expenses & Accrued Expenses. TEACHERS: click here for quick copy question ID numbers.

If you initially record supplies as an expense, the amt. in the exp. acct. before adjustment equals the beg. bal. in the supplies exp. acct. + all supplies bought during the period
a) True
b) False

Wilson, Inc. signs a 90-day, 8% note for $5,000. The entry would be recorded in the cash payments journal.
a) True
b) False

The day a note is due is called the
a) date of a note
b) interest date of a note
c) maturity date of a note
d) principal date of a note

The adjusting entry for supplies is made only when financial statements need to be prepared. This fact is an application of which accounting concept?
a) adequate disclosure
b) historical cost
c) matching expenses with revenue
d) revenue recognition

An amount paid for the use of money for a period of time is called
a) bank charges
b) interest
c) principal
d) security

In order to recognize salary expense as a liability in the period in which employees provided their services, the company records accrued salary expense as a(n)
a) adjusting entry
b) closing entry
c) reversing entry
d) work sheet entry

Wilson, Inc. signed a 90-day, 9% note for $3,000. The interest due at maturity is
a) $27
b) $50
c) $57.50
d) $67.50

Promissory notes signed by a business and given to a creditor are called
a) loans payable
b) notes payable
c) notes receivable
d) mortgages payable

The % of the principal that is paid for use of the money is called the
a) bank rate of a note
b) interest rate of a note
c) prepaid interest on a note
d) principal rate of a note

Notes payable due within the next year are classified as
a) current assets
b) current liabilities
c) long-term assets
d) long-term liabilities

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