Advanced Accounting Chapter 8

Front

The date on which the principal of a note is due to be repaid is the

Back

maturity date of a note

Front

Obtaining capital by borrowing money for a period of time is called

Back

debt financing

Front

An amount paid for the use of money for a period of time is called

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interest

Front

Expenses paid in one fiscal period but not reported as expenses until a later fiscal period are known as

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prepaid expenses

Front

The original amount of a note is called the

Back

principal

Front

The interest accrued on borrowed funds is called

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interest expense

Front

A written and signed promise to pay a sum of money at a specified time is called a

Back

promissory note

Front

A company signed a 90-day note on March 15 of the current year. The maturity date of the note is

Back

June 13

Front

An entry that is the exact opposite of an adjusting entry is known as a(n)

Back

reversing entry

Front

When a note is paid at maturity, the credit is to Cash. The entry debits

Back

Notes Payable for the principal of the note and Interest Expense for the interest due on the note