MCQ Questions
Q.1.
The party promising to pay a note at maturity is the payee.
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    True
  • 0%
    False
Q.2.
The journal entry to record a note received from a customer to apply on account is
  • 0%
    False
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    debit Notes Receivable; credit Accounts Receivable
  • 0%
    dishonored
  • 0%
    maturity value
Q.3.
If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored.
  • 0%
    True
  • 0%
    False
Q.4.
A 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is
  • 0%
    False
  • 0%
    $10,200
  • 0%
    $9,000
  • 0%
    $300
Q.5.
The maturity value of a note receivable is always the same as its face value.
  • 0%
    True
  • 0%
    False
Q.6.
The amount of a promissory note is called the
  • 0%
    False
  • 0%
    maturity value
  • 0%
    face value
  • 0%
    dishonored
Q.7.
The amount of the promissory note plus the interest earned on the due date is called the
  • 0%
    dishonored
  • 0%
    maturity value
  • 0%
    face value
  • 0%
    True
Q.8.
A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is
  • 0%
    debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; Credit Interest Revenue, $120
  • 0%
    $10,200
  • 0%
    debit Notes Receivable; credit Accounts Receivable
  • 0%
    $9,000
Q.9.
When a note is received from a customer on account, it is recorded by debiting Accounts Receivable and crediting Notes Receivable.
  • 0%
    True
  • 0%
    False
Q.10.
In computing the maturity date of a note, the date the note is issued is included but the due date is omitted.
  • 0%
    True
  • 0%
    False