Greeson Corp

question 133

Multiple Choice

Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a "Discount on Note Payable" account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made at December 31, 2014 will include a

• A) debit to Discount on Note Payable for $1,300.
• B) debit to Interest Expense for $2,600.
• C) credit to Discount on Note Payable for $1,300.
• D) credit to Interest Expense for $2,600.

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Definitions:

Labor Input

Labor input is the amount of work provided by employees or workers, contributing to the production of goods and services within an economy or firm.

Marginal Resource Cost

The increase in total cost incurred by employing one more unit of a resource, such as labor or capital.

Total Cost

The sum of all costs incurred by a business in the production of goods or services, including fixed and variable costs.

Input

Resources (such as labor, materials, and capital) used in the production process to create goods or services.