When a Notes Receivable Is Outstanding at the End of an Accounting

question 1

Multiple Choice

When a notes receivable is outstanding at the end of an accounting period,________.

• A) no adjusting entry is needed
• B) the revenue recognition principle requires that earnings from the note be recorded in the year the cash is received
• C) the total interest on the note should be recorded in an adjusting entry
• D) the interest revenue earned on the note up to year-end is part of that year's earnings

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Definitions:

Railroad Corporations

Business entities that own, operate, or manage railroads, playing a crucial role in the development of transportation and economic expansion.

Federal Government

The national government of a federated state, which shares sovereignty with its constituent units and possesses powers specifically granted to it by a constitution.

Unions

Organizations formed by workers in various industries to protect and advance their interests by negotiating wages, work hours, and working conditions with employers.

Salvation Army

A Christian denominational church and international charitable organization known for its humanitarian aid work, including relief efforts for the poor and disaster victims.