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- 1. Multiple Choice
There is no risk involved when discounting a note receivable.TrueFalse - 2. Multiple ChoiceA Dishonored Note is a note which has been taken to a bank prior to it's maturity date, in an effort to gain cash quickly.TrueFalse
- 3. Multiple ChoiceWhat is the very first thing that you need to calculate for the bank discount amount?Maturity ValueInterest on the note.Proceeds of the note.Discount period.
- 4. Multiple ChoiceA contingent responsibility occurs when the payee discounts a note.TrueFalse
- 5. Multiple ChoiceThe equation to calculate the bank discount is:Maturity Value + Discount Rate + Discount Period =Maturity Value - Bank Discount =Maturity Value X Discount Rate X Discount Date =Maturity Value X Discount Rate X Discount Period.
- 6. Multiple ChoiceA note is issued on May 2 for $11,500 with 120-day terms at 6.75%. On July 15, the payee discounts the note for 5%. What is the maturity date of the note?August 30November 12September 1August 31
- 7. Multiple ChoiceA note is issued on May 2 for $11,500 with 120-day terms at 6.75%. On July 15, the payee discounts the note for 5%. What is the maturity value of the note?11500
11500$255.2111755.2111274.79 - 8. Multiple ChoiceA note is issued on May 2 for $11,500 with 120-day terms at 6.75%. On July 15, the payee discounts the note for 5%. What is the discount period of the note?64 days74 days46 days
- 9. Multiple ChoiceA note is issued on May 2 for $11,500 with 120-day terms at 6.75%. On July 15, the payee discounts the note for 5%. What is the bank discount on the note?$74.07$72.47$255.21$11,425.93
- 10. Multiple ChoiceA note is issued on May 2 for $11,500 with 120-day terms at 6.75%. On July 15, the payee discounts the note for 5%. What are the proceeds on the note?$11,829.28$11,681.14$11,755.21
- 11. Multiple ChoiceNotes Receivable account:Amount recorded is the Principal, and is for notes that have matured.Amount recorded is the Principal, and is for notes that have not matured.Amount recorded is the maturity value, and is for notes that have matured.Amount recorded is the maturity value, and is for notes that have not matured.
- 12. Multiple ChoiceThe contra asset to Notes Receivable is:Notes Receivable Past DueNotes Payable DiscountedNotes Receivable DiscountedInterest Receivable
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