Cheung Ltd Has an Account Receivable for $12 000 from R.Morris

question 10

Multiple Choice

Cheung Ltd has an account receivable for $12 000 from R.Morris that is overdue.Morris requests a 60-day extension of the payment date and Cheung Ltd agrees by accepting a fixed 60-day,12% promissory note in exchange for the accounts receivable.The entry Cheung Ltd makes on receipt of the note is:

• A)Debit Accounts Receivable $12 000,debit Unearned Interest $236.71; credit Bills Receivable $12,236.71
• B)Debit Bills Receivable $12 236,71; credit Accounts Receivable $12 000,credit Unearned Interest $236.71
• C)Debit Bills Receivable $12,000; credit Accounts Receivable $12 000
• D)Debit Bills Receivable $12 236,71; credit Accounts Receivable $12 000,credit Interest Revenue $236.71

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Definitions:

Defensive Strategy

A business approach aimed at protecting an organization's current market share, products, and services from competitors.

Discretionary Responsibilities

Voluntary activities and behaviors that go beyond the basic requirements of the job, intended to benefit the organization or its stakeholders.

Social Responsibility

An ethical framework suggesting that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.

Defensive Strategy

Tactics employed by a company to protect its market share, products, or services from competitors or potential threats.