When a Note Matures, the Payee Should Record

question 142

Multiple Choice

When a note matures, the payee should record:

• A)interest expense.
• B)interest revenue.
• C)interest payable.
• D)unearned revenue.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the current business cycle, whichever is longer.

Obligations

Responsibilities or duties to fulfill terms of contracts, loans, and legal agreements.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Liquidity

A measure of how easily assets can be converted into cash without affecting their market price.