Present Value

Question 1

Short term notes receivables and payables (due within one year) should be recorded at this amount

Answer 1

Maturity value

Question 2

Long term receivables and payables should be recorded at this amount

Answer 2

Present value of net amount (note +/- premium or discount)

Question 3

Interest revenue/expense is computed using this iterest rate

Answer 3

Effective rate

Question 4

Results when the face of a note receivable/payble exceeds its present value–should result in a direct reduction from the face amount of thenote on the balnce sheet

Answer 4

Discount

Question 5

REsults when the face of a note receivable/payable is lower than its face value–should be reported as an addition to hte face amount of the note on the balance sheet

Answer 5

Premium

Question 6

Loan origination costs incured when originating or acquiring a loan should be treated like this, with all indirect expenses charged to expense as incurred

Answer 6

Defer , add to principal, and recognize over hte life of the loan

Question 7

one point (usually in reference to a nonrefundable loan origination fee)

Answer 7

=1%

Question 8

Any fee charged to a client in a loan origination process whoudl be treated like this

Answer 8

deducted fromthe pricnipal by BOTH parties in calculating hte carrying amount