When the Maker of a Note Defaults

question 97

Multiple Choice

When the maker of a note defaults:

• A)An account receivable is recorded for the principal amount of the note only.
• B)An account receivable is recorded in the amount of the principal plus interest through the maturity date.
• C)Any interest earned for the current period is not recorded,since the maker has defaulted.
• D)Any interest earned in a previous period that has already been recorded as interest receivable is written off as a loss due to the maker's default.

---

Definitions:

Two-factor Theory

A theory that proposes that emotions are based on physiological arousal and cognitive labeling of the cause of that arousal.

James-Lange Theory

A theory suggesting that emotions result from the perception of bodily reactions to an event.

Arousal Theory

A theory suggesting that people are motivated to maintain an optimal level of arousal, seeking to increase or decrease stimulation to achieve this level.

Spillover Effect

The phenomenon where an emotional reaction to one event spills over and influences the response to another event.