The Principal Value of a Note Refers to the Amount

question 4

Multiple Choice

The principal value of a note refers to the amount

• A)that has been dishonoured.
• B)borrowed plus interest received at maturity from the maker.
• C)at which the note receivable is recorded.
• D)remaining after a service charge has been deducted.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends but reinvested in the business or kept as reserve.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Permanent Accounts

Balance sheet accounts that carry their ending balances over into the next accounting period, such as assets, liabilities, and equity accounts.

Accumulated Depreciation-Equipment

The total depreciation that has been recorded against a company's equipment since it was put into service.