The Total Interest Owing on a $6,000, 4%, 2-Month Note

question 74

Multiple Choice

The total interest owing on a $6,000, 4%, 2-month note receivable is

• A)$20.
• B)$40.
• C)$240.
• D)$6,040.

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Definitions:

Stockholders' Equity

The remaining value of a corporation's assets once liabilities are subtracted, which signifies the share of ownership held by the shareholders.

Prepaid Expenses

Expenses paid for in advance and recorded as assets before they are used or consumed.

Acid-Test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Marketable Securities

Financial instruments that can be easily converted into cash. They include stocks, bonds, and Treasury bills among others.