When a Note Is Received from a Customer to Obtain

question 37

Multiple Choice

When a note is received from a customer to obtain an extension of time for payment on a past-due account, the journal entry would include

• A) debiting Accounts Receivable and crediting Notes Receivable.
• B) debiting Accounts Payable and crediting Notes Payable.
• C) debiting Notes Payable and crediting Accounts Payable.
• D) debiting Notes Receivable and crediting Accounts Receivable.

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Definitions:

Depressant

A substance that reduces the functioning of the nervous system, often used to decrease anxiety and induce sleep.

Narcotic

A class of substances that relieve pain and induce a state of sleep or stupor; often associated with opioids, which can be both legal medications and illicit drugs.

Barbiturates

A class of drugs that are used as sedatives and hypnotics, which can depress the central nervous system.

Drug Interaction

A modification in the effect of a drug when it is taken in combination with another drug, leading to increased efficacy, reduced effectiveness, or adverse side effects.