On October 1,2014,Allen Jewelry Company Accepted a 4-Month,10% Note for $2,400

question 26

Multiple Choice

On October 1,2014,Allen Jewelry Company accepted a 4-month,10% note for $2,400 in settlement of an overdue account receivable.If the company accrues interest at year-end only,how much interest revenue should be accrued on December 31,2014?

• A) $80
• B) $60
• C) $240
• D) $40

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Definitions:

Compensatory Damages

A monetary award in a lawsuit intended to compensate the injured party for the loss or injury they have suffered.

Plaintiff Reimbursement

The process through which a plaintiff may be compensated for costs or losses incurred, often as part of the judgment in a legal case.

Res Ipsa Loquitur

A legal doctrine that allows for the assumption of negligence on the part of a defendant when an accident is of a type that typically does not occur without negligence.

Doctrine Application

A legal principle that is applied to a case or situation to resolve it.