Contributor Enterprise Borrowed $2,400 on February 1,2012 $\begin{array}{lll}\text { } & \mathrm{Dr.}& \mathrm{Cr.}\\{\text { Notes Payable Expense }} & 2,400 & \\\text {Cash } & & 2,400 & \\\end{array}$

question 103

Multiple Choice

Contributor Enterprise borrowed $2,400 on February 1,2012.All interest has been paid and properly recorded for separately.On March 31,2012,the company repaid the loan.Which of the following is the journal entry to be made at the time of the loan repayment?

• A)\(\begin{array}{lll}
• \text { } & \mathrm{Dr.}& \mathrm{Cr.}\\
• {\text { Notes Payable Expense }} & 2,400 & \\
• \text {Cash } & & 2,400 & \\
• \end{array}\)
• B)\(\begin{array}{lccc}
• \text { } & \mathrm{Dr.}& \mathrm{Cr.}\\
• \text { Notes Payable } & 2,400& \\
• \quad \text { Cash } & & 2,400\\
• \end{array}\)
• C)\(\begin{array}{lccc}
• \text { } & \mathrm{Dr.}& \mathrm{Cr.}\\
• \text { Cash } & 2,400 & \\
• \quad \text { Notes Payable Expense } & & 2,400\\
• \end{array}\)
• D)\(\begin{array}{lccc}
• \text { } & \mathrm{Dr.}& \mathrm{Cr.}\\
• \text { Cash } & 2,400 & \\
• \quad \text { Notes Payable } & & 2,400\\
• \end{array}\)
• E)\(\begin{array}{lccc}
• \text { } & \mathrm{Dr.}& \mathrm{Cr.}\\
• \text { Cash } & 2,400 & \\
• \quad \text { Notes Receivable } & & 2,400\\
• \end{array}\)

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Definitions:

Disposable Income

The sum of funds households can spend and save after deducting income taxes.

APS

Average Propensity to Save, which measures the proportion of income that is saved rather than spent.

Capacity Utilization Rate

The percentage of a firm's total potential production capacity that is actually being utilized in the production of goods or services.

Manufacturing Firms

Companies engaged in the industrial process of converting raw materials into finished products through human labor and machinery.