The Journal Entry to Record the Issuance of a Note

question 76

Multiple Choice

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

• A) debit Cash; credit Accounts Payable
• B) debit Accounts Payable; credit Cash
• C) debit Cash; credit Notes Payable
• D) debit Accounts Payable; credit Notes Payable

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Definitions:

Scrap Value

Scrap value is the estimated residual value of an asset at the end of its useful life, often considered when calculating depreciation.

Financial Advantage

The benefit obtained in financial terms, which can be through gains in revenues, reductions in costs, or improved profitability.

Reworked Material

Materials that have been corrected or modified after initial processing to meet the required standards.

Avoidable Costs

These are expenses that can be eliminated if a particular decision is made or if a certain action is avoided.