A Six-Month Note Receivable for $8,000 at 13%, Dated October

question 76

Multiple Choice

A six-month note receivable for $8,000 at 13%, dated October 1, 2020, has accrued interest revenue of ________ as of December 31, 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

• A) $1,040
• B) $520
• C) $260
• D) $130

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Definitions:

Asset Test

A measure used to determine the liquidity of a company by comparing its liquid assets to its current liabilities.

Operating Segments

Individual, identifiable components of an enterprise that engage in business activities, earn revenues, and incur expenses.

Reportable

Pertaining to information or data that must be disclosed or presented in official reports.

LIFO Cost-Flow

A method in inventory valuation where the most recently produced or acquired items are considered sold first, leading to older inventory costs being reported in the financial statements.