1. What is the maturity value of a note? A. The principal amount minus interest
ID: 2485526 • Letter: 1
Question
1. What is the maturity value of a note? A. The principal amount minus interest due B. The principal amount plus interest due C. The face amount of the note D. The principal amount times the interest rate
2.
A creditor is a person or business who:
has a payable to another party.
purchases goods on account
invests money in the stock of a company.
has a receivable from another party.
3.
A company has significant uncollectible receivables. Why is the direct write-off method unacceptable?
Assets will be understated on the balance sheet.
It violates the matching principle.
Direct write-offs would be immaterial.
It is not allowed for tax reasons.
4.
The following information is needed to reconcile the cash balance for Woods Paper Products.
• A deposit of $5,794.62 is in transit
.• Outstanding checks total $1,533.25.
• The book balance is $5,695.62
.• The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent
.• The bank balance at February 28, 2008 was $16,500.25
.• A deposit of $300 was credited by the bank for $3,000.
• A customer's check for $1,280 was returned for nonsufficient funds
.• The bank service charge is $70.
Which of the following journal entries is needed to adjust for the NSF check?
Accounts receivable 1,280
Cash 1,280
Cash 1,280
Sales revenue 1,280
NSF check 1,280
Cash 1,280
Accounts payable 1,280
Cash 1,280
5.
Zorro Company has significant amounts of accounts receivable, and experiences uncollectible accounts from time to time. Zorro uses the direct write-off method. When Zorro Company writes off an uncollectible receivable, what is the effect of that single transaction?
It will reduce net income.
It will have no effect on net income.
It will increase total assets of the company.
It will generate positive cash flow.
A.has a payable to another party.
B.purchases goods on account
C.invests money in the stock of a company.
D.has a receivable from another party.
Explanation / Answer
1. Maturity value of a note or bond is always its face value.
Correct answer is C.
2. A creditor is a person or a business who owns money from another person or business.
Correct answer is D.
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