18. IDENTIFICATION. This refers to a sale of a single of multiple receivables to any financing institution at a discount. 19. TRUE OR FALSE. The proceeds from discounting is computed by deducting the discount from the carrying value of the notes receivable.
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18. IDENTIFICATION. This refers to a sale of a single of multiple receivables to any financing institution at a discount.
19. TRUE OR FALSE. The proceeds from discounting is computed by deducting the discount from the carrying value of the notes receivable.
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- Please answer ASAP thanks in advance TRUE or FALSE. The proceeds from discounting is computed by deducting the discount from the carrying value of the notes receivableWhich of the following is not true about the discount on short-term notes payable? a. The Discount on Notes Payable account should be reported as an asset on the balance sheet. b. When there is a discount on a note payable, the effective interest rate is higher than the stated discount rate. c.The Discount on Notes Payable account has a debit balance. d. Discount on Notes Payable is a contra account to Notes Payable.Which of the following statements is correct? If the note is issued at a discount, the interest income to be recognized every period is a. Either higher or lower than the amount of cash received for interest depending on the amount of the discount b. Equal to the amount of cash received for interest c. Lower than the amount of cash received for interest d.
- Which of the following is true? Short-term notes payable should be discounted at its present value, more so, if it constitutes a financing transaction and the imputed interest can be measured without undue cost or effort. Transaction costs of issuing financial liabilities are expensed outright. The present value of a serial note's principal is computed by using the PV of 1 as the present value factor. Notes payable are obligations supported by creditor's promissory notes.19.Which of the following statements is incorrect? a. Trade receivables are recognized simultaneously with the recognition of related revenue when the criteria for revenue recognition are met. b. Under the gross price method, sales discounts are reported as a deduction from sales revenue. c. When accounts receivable are pledged against borrowing, the amount of accounts receivable pledged shall be included in the total receivables with disclosures. d. When discounting notes, the term discount period refers to the period of time that the note has been held by the endorser or payee; i.e. the period from the date of the note up to the date of discounting.Total receivables will remain unchanged for which of the following?* a. Collection of trade accounts receivable b. Assignment of receivables c. Factoring of receivables d. Notes receivable discounting without recourse
- IA-Receivable Financing 3. Identification. If the proceeds from discounting is less than the carrying value of the Notes Receivable, an interest expense is recorded. This refers to what type of discounting with recourse?Which of the following is false about the discount on short-term notes payable? The Discount on Notes Payable account has a debit balance. The Discount on Notes Payable account should be reported as an asset on the balance sheet. If there is a discount on notes payable, the effective interest rate is higher than the stated discount rate. All of these are trueMatching Select the term that best fits each of the following definitions and descriptions. a. Notes receivable b. Nontrade receivables c. Net realizable value d. Direct write-off method e. Interest-bearing note f. Maturity date g. Promissory note h. Factoring receivables i. Trade discount j. Present value k. Allowance method l. Sales discount m. Negotiable note n. Non-interest-bearing note o. Assignment of receivables p. Valuation date 11. A method of recognizing the actual losses from uncollectible accounts as expenses during the period in which the receivables are determined to be uncollectible. 12. The amount of cash expected to be received from the conversion of assets in the normal course of business. 13. The sale of receivables without recourse for cash to a third party, usually a bank or other financial institution. 14. Receivables that are evidenced by…
- 11.When a note receivable is discounted with recourse, a. Liability on Discounted Notes Receivable is credited e b. Liability on Discounted Notes Receivable is credited equal to the proceeds. c. Notes Receivable is credited equal to the face value. d. Notes Receivable is credited equal to the maturity value.Which of the following is true when accounts receivable are factored without recourse? a. The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. b. The financing cost (interest expense) should be recognized ratably over the collection period of the receivables. c. The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables. d. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.All of the following are problems associated with the valuation of accounts receivable except A) uncollectible accounts B) returns C) Cash discounts under the net method D) allowances granted