The Notes Receivable Discounted Account

question 21

Multiple Choice

The Notes Receivable Discounted account

• A)has a debit balance.
• B)is shown as a deduction from Notes Receivable on the balance sheet.
• C)is used to record the amounts due on dishonored notes.
• D)is used to record the amount of interest deducted by the bank when a note is discounted.

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Definitions:

P/E Ratio

Price-to-Earnings Ratio, a valuation metric that compares a company's stock price to its per-share earnings, used to evaluate if a stock is over or undervalued.

EPS

Earnings per share, a company's profit divided by its number of outstanding shares.

Intrinsic Value

The actual value of a company or an asset based on underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

P/E Multiple

Price-to-Earnings ratio, a valuation metric calculated by dividing the current market price of a stock by its earnings per share, indicating how much investors are willing to pay per dollar of earnings.