The Journal Entry a Company Uses to Record the Issuance

question 11

Multiple Choice

The journal entry a company uses to record the issuance of a discounted note for the purpose of borrowing funds for the business is

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

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Definitions:

Goods Manufactured

The completed products that are ready for sale, resulting from the manufacturing process.

Job-Order Costing

A cost accounting system where costs are assigned to specific jobs or batches, used in industries where goods or services are produced upon request.

T-Accounts

A visual representation of accounts used in double-entry bookkeeping, showing debits on the left and credits on the right.

Overapplied Overhead

A situation where the overhead allocated to products is more than the actual overhead incurred.