When a Company Issues a Promissory Note,the Accountant Records an Entry

question 41

Multiple Choice

When a company issues a promissory note,the accountant records an entry that includes a credit to Note Payable for the

• A) face value of the note.
• B) face value of the note plus the interest that will accrue.
• C) face value less the interest that will accrue.
• D) maturity value of the note.

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Definitions:

EOQ

Economic Order Quantity; the ideal order quantity a company should purchase to minimize its inventory costs, including holding, shortage, and order costs.

Just-In-Time

An inventory management strategy that aims to increase efficiency and reduce waste by receiving goods only as they are needed in the production process.

Manufacturing Firms

Companies engaged in the production of goods in large quantities, often utilizing complex machinery and human labor in factories.