The Journal Entry to Record a Note Received from a Customer

question 33

Multiple Choice

The journal entry to record a note received from a customer to replace an account is

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

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Definitions:

Certainty Of Payment

The assurance or guarantee that payment will be made, often a crucial consideration in financial transactions and agreements.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Stop Payment

A stop payment is a request made to a financial institution to cancel the processing of a check or payment transaction before it has been finalized.

Bills Of Exchange Act

Legislation governing the creation, transfer, and payment of bills of exchange, a type of negotiable instrument.