Adv. Accounting - Ch. 10 Review Question Preview (ID: 13468)


Notes Receivable, Unearned Revenue & Accrued Revenue. TEACHERS: click here for quick copy question ID numbers.

A note that is not paid when due is called a(n)
a) overdue note
b) dishonored note
c) unpaid note
d) discarded note

If unearned revenue is first recorded as a liability, no adjusting or reversing entry is required.
a) True
b)
c)
d) False

Interest rates on notes receivable are generally stated in terms of days, since most notes receivable are for 90 days or less.
a) True
b)
c)
d) False

A company may issue notes receivable to employees (FYI-p. 292).
a) True
b)
c)
d) False

When unearned revenue is recorded, the amount to be received in the future is not yet known.
a) True
b)
c)
d) False

By transferring the maturity value of a dishonored note from a customer to Accounts Receivable, the business has a complete credit history on the customer's transactions.
a) True
b)
c)
d) False

When the note receivable from a customer is not paid when it comes due, the business transfers the maturity value of the note to the accounts receivable account.
a) True
b)
c)
d) False

If a business accepts a large number of notes receivable, it may maintain a separate ledger, similar to the accounts receivable ledger.
a) True
b)
c)
d) False

If the maturity date of a note is in a fiscal period that is different from the date of the note, an adjusting entry will be needed at the end of the fiscal period.
a) True
b)
c)
d) False

A common use of a note receivable is when a business borrows money from the bank to pay vendors.
a) True
b)
c)
d) False

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