Martinez Co

question 28

Multiple Choice

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60-day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

• A) debit to Interest Payable for $750
• B) debit to Interest Expense for $750
• C) credit to Cash for $50,000
• D) credit to Cash for $54,500

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Definitions:

Expected Value

A statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen, often used in decision-making and risk assessment.

Outcome

The result or consequence of an action, process, or situation, typically measured against expected or intended objectives.

Expected Monetary Value

A statistical concept used to calculate the average outcome when the future includes scenarios that may or may not happen.

Uncertainty

Uncertainty refers to the lack of certainty, predictability, or definiteness about an outcome or condition, often requiring risk assessment and management strategies.