Peecher Accepted a Three-Year, Noninterest-Bearing Note in Exchange for Merchandise

question 133

Multiple Choice

Peecher accepted a three-year, noninterest-bearing note in exchange for merchandise sold. Which of the following is true?

• A) Peecher would credit a discount on note receivable when recording the sale.
• B) Peecher would debit interest revenue over the life of the note.
• C) Peecher would debit notes receivable when the note is collected.
• D) Peecher would multiply sales revenue by the effective interest rate to determine interest revenue each period.

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Definitions:

Trait Approach

A perspective in psychology that theorizes personality is comprised of broad, consistent behaviors or dispositions called traits, which this approach aims to identify and measure.

Heredity

The transmission of physical or mental traits from one generation to the next through genetics.

Mother

A female parent or guardian of a child, who may also play a pivotal role in the child's development and upbringing.

Infant

A very young child or baby, typically under one year of age, characterized by rapid physical and cognitive development.