Mod 13A Wrong Answers Flashcards Preview

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Flashcards in Mod 13A Wrong Answers Deck (8):

What should be used to record the amount of the purchased machine, where a one time lump sum payment is made, assuming a 10% interest rate?

Cost of machine x present value of $1


In recording the transaction recognition where a note receivable is issued with a related merchandise discount, what should be recorded?

Discount on note receivable should be recorded

Deferred charge should be recorded


The total interest revenue earned over the life of the note equals...

The excess of cash received over the cash paid to acquire the


Discount on notes payable, classification

Liability valuation account


Discount on notes payable should be recorded on the balance sheet as...

A direct reduction from the face amount of the note


A premium on notes payable would be reported on the balance sheet as...

An addition to face amount on the note


The discount on notes receivable is not a Deferred credit separate form the note because it is...

A debit


When a note is issued with a stated rate of 8% below the market rate of 10%, the note will be issued...

At a discount