When a Borrower Receives the Face Amount of a Discounted

question 167

Multiple Choice

When a borrower receives the face amount of a discounted note less the discount, the amount received is known as

• A) the note proceeds
• B) the note discount
• C) the note deferred interest
• D) the note principal

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Definitions:

Parent and Subsidiary

A parent and subsidiary relationship exists when one company, the parent, owns more than half of another company, the subsidiary, granting control and often integrating operations or management.

Consolidated Financial Statements

Consolidated financial statements aggregate the financial information of a parent company and its subsidiaries, presenting it as if the group were a single entity.

Controlling Influence

The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Interest Revenue

Income earned from lending money or investing in interest-bearing financial instruments.