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:

Soul

The spiritual or immaterial part of a human being or animal, often regarded as immortal.

Animism

Belief that all things possess a spirit.

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Principles or beliefs held by individuals who advocate for a strict adherence to specific theological doctrines, usually within a religious context.

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Likely to be influenced or harmed by a particular thing or condition due to vulnerability or lack of resistance.