Accounting Chapter 20

If a customer is unable to pay an account the _________ is changed to a note receivable.

A person or organization to whom a liability is owed is called a(n):

Time between date a promissory note signed & date the note is due is typically expressed in:

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

Interest may be earned before it is received.

Promissory notes signed by a business and given to creditors are called notes payable.

The interest accrued on a note payable is debited to an expense account titled:

Interest income is investment revenue rather than revenue from normal operations.

The interest earned on money loaned is called interest received.

The primary medium of exchange for business transactions is cash.

Promissory notes that a business accepts from customers are called:

Interest income is calculated using the same method as that used for notes payable.

When a business signs a promissory note, the principal is credited to a liability account:

Notes receivable that have terms longer than a year are classified as current assets.

If a business receives more cash than it needs to pay for needed purchases and expenses

To calculate the interest for one year, the principal is multiplied by the interest rate.

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

Liabilities due within a short time, usually one year, are called: