Electron Borrowed $75,000 from TechCom by Signing a Promissory Note

question 115

Multiple Choice

Electron borrowed $75,000 from TechCom by signing a promissory note and pledging$85,000 in accounts receivable as security. TechCom's entry to record the transaction should include a:

• A)Credit to Notes Receivable for $75,000.
• B)Credit to Sales for $75,000.
• C)Debit Notes Payable for $75,000.
• D)Debit to Accounts Receivable for $75,000.
• E)Debit to Notes Receivable for $75,000.

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Definitions:

Carrying Cost

The total costs associated with holding inventory or assets, including storage, insurance, and taxes.

Administrative Costs

Expenses related to the general operation of a business, including salaries of executive officers, legal and clerical salaries, and other general expenses.

Sales Taxes

Taxes imposed by governments on sales of goods and services, typically calculated as a percentage of the retail price paid by the consumer.

Perpetual Systems

Inventory management systems that continuously update the quantity and value of inventory stock, allowing for real-time tracking.