Which of the Following Statements Is Not Correct

question 94

Multiple Choice

Which of the following statements is not correct?

• A)When a note receivable is discounted, the proceeds are computed by subtracting the discount from the maturity value of the note.
• B)The entry to record the discounting of a note receivable may result in the recognition of interest expense.
• C)When a note is discounted at a bank, the proceeds are always less than the maturity value of the note.
• D)When a note receivable is discounted at a bank, the entry to record the transaction includes a debit to cash.

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Definitions:

Operating Data

Information collected on the performance and efficiency of day-to-day operations within a company.

Budgeted Volume

The amount of production or sales a company plans to achieve within a certain period as part of its budgeting process.

Production

The process of creating, manufacturing, or enhancing the value of goods and services.

Expected Sales

The projected amount of sales revenue that a company anticipates to earn in a future period.