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WorksheetsAcct. 2-Ch. 4 Discounting Notes Receivable
Total questions: 12
Worksheet time: 22mins
Name
Class
Date
1.
There is no risk involved when discounting a note receivable.
a)
True
b)
False
2.
A 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.
a)
True
b)
False
3.
What is the very first thing that you need to calculate for the bank discount amount?
a)
Maturity Value
b)
Interest on the note.
c)
Proceeds of the note.
d)
Discount period.
4.
A contingent responsibility occurs when the payee discounts a note.
a)
True
b)
False
5.
The equation to calculate the bank discount is:
a)
Maturity Value + Discount Rate + Discount Period =
b)
Maturity Value - Bank Discount =
c)
Maturity Value X Discount Rate X Discount Date =
d)
Maturity Value X Discount Rate X Discount Period.
6.
A 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?
a)
August 30
b)
November 12
c)
September 1
d)
August 31
7.
A 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?
a)
11500
11500
11500
b)
$255.21
c)
11755.21
d)
11274.79
8.
A 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?
a)
64 days
b)
74 days
c)
46 days
9.
A 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?
a)
$74.07
b)
$72.47
c)
$255.21
d)
$11,425.93
10.
A 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?
a)
$11,829.28
b)
$11,681.14
c)
$11,755.21
11.
Notes Receivable account:
a)
Amount recorded is the Principal, and is for notes that have matured.
b)
Amount recorded is the Principal, and is for notes that have not matured.
c)
Amount recorded is the maturity value, and is for notes that have matured.
d)
Amount recorded is the maturity value, and is for notes that have not matured.
12.
The contra asset to Notes Receivable is:
a)
Notes Receivable Past Due
b)
Notes Payable Discounted
c)
Notes Receivable Discounted
d)
Interest Receivable
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