Accounts Payable and Notes Payable Quiz
8 multiple-choice questions with answers and explanations · 1 easy, 5 medium, 2 hard
Trade payables, purchase returns, supplier statement reconciliations, and interest-bearing and non-interest-bearing notes payable.
- 1Accounts Payable: What Does It Represent?Accounts payable represents:easy
- 2Accrued Interest on a Note PayableOn November 1, a company signs a 6-month, 12%, $30,000 note payable. At its December 31 year-end, the adjusting entry for accrued interest is for:medium
- 3A Non-Interest-Bearing Note PayableA company issues a $20,000, non-interest-bearing, 1-year note payable to purchase equipment, when the market rate for similar borrowing is 8%. The equipment (and the note) should be initially recorded at approximately:medium
- 4Accounts Payable: Recording a Purchase ReturnA business using a periodic inventory system returns $400 of goods bought on credit to its supplier. The entry is:medium
- 5Supplier Statement Reconciliation: Finding the Correct Balance OwedA buyer’s ledger shows $4,200 owed to a supplier, but the supplier’s statement shows $5,000. The only difference is an $800 payment sent on the last day of the month, not yet received by the supplier. What is the correct amount owed?medium
- 6Accounts Payable vs Notes PayableHow does a note payable differ from an account payable?medium
- 7Partial-Period Accrued Interest on a Note PayableA company signs a 6-month, 10%, $24,000 note payable on October 1, accruing 3 months of interest ($600) at its December 31 year-end. The note matures on March 31 and is paid in full. The interest expense recognized in the NEW fiscal year, from January 1 through the maturity date, is:hard
- 8Accounts Payable: An Unrecorded Purchase at the Year-EndGoods were received on 29 December and included in the year-end inventory count, but the supplier’s invoice arrived on 4 January and was not recorded in the year. The effect on the year’s financial statements is:hard