Comfort Shoes Received a Promissory Note from a Customer on April

question 70

Multiple Choice

Comfort Shoes received a promissory note from a customer on April 1, 2016.The face amount of the note is $2,000; the terms are 12 months and 8% annual interest.At the maturity date, the customer pays for the note and interest.Comfort Shoes made the proper adjustment at the end of December for interest.The effect of recognizing the transaction on the maturity date is

• A) A decrease to Cash
• B) An increase to Notes Receivable
• C) An increase to Discount on Notes Receivable
• D) A decrease to Notes Receivable

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Definitions:

Trust

The confidence or belief in the integrity, reliability, and fairness of a person or system.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group and is used to generate and prioritize ideas.

Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution of a problem.

Evaluation Apprehension

The anxiety or concern individuals may feel when they know they are being assessed or judged by others, which can impact performance.