Accounting for Long-Term Credit Sales Transactions Utilizing Notes Receivable

question 106

Multiple Choice

Accounting for long-term credit sales transactions utilizing notes receivable

• A)ignores interest unless an interest rate is specified in the note.
• B)makes it difficult to assess the degree to which a company's overall earnings are due to profitable credit sales versus profitable customer financing.
• C)achieves a clear separation between income from credit sales and interest earned.
• D)is controversial because it necessitates use of an assumed interest rate.

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