ACCT 2014 Ch. 8 Review

All of the following are true about the difference between Accounts Receivable and Notes Receivable EXCEPT

• Notes Receivable are longer term than Accounts Receivable

• Notes Receivable result from a written/formal agreement

• Notes Receivable are only related to inventory purchases

• Notes Receivable charge interest

Accounts Receivable minus Allowance for Doubtful Accounts is called

• Net Realizable Value

• Net Book Value

• Fair Market Value

• Collectible Value

Dr. Fortner gives Dr. Brown a 90-day note for $20, with 5% interest on January 1. Which of the following is true?

• Dr. Brown owes Dr. Fortner $20

• In 90 days, Dr. Fortner will pay Dr. Brown $5

• In 90 days, Dr. Fortner will pay Dr. Brown $20.25

• Dr. Fortner loaned Dr. Brown $20

President Lewis borrowed $100 from Melissa at 10% interest for 180 days. What is the face amount of the note?

• $100

• $10

• $5

• $18

Under the Allowance method, Bad Debt Expense is debited when

• a specific account is deemed uncollectible

• an adjusting entry is made at the end of the period

• a customer account is reinstated

• a customer declares bankruptcy