Match the terms with the definitions.
-Interest expense that has been incurred but not paid.
A)accrued interest on notes payable
B)time
C)proceeds (note receivable)
D)principal of the note
E)notes payable register
F)credit advice
G)maturity value
H)discounting a note receivable
I)dishonored
J)effective rate
K)promissory note
L)maker

Question

Quizplus · Accepted Answer

Accrued interest on notes payable refers to the interest expense that has been earned but not yet paid. It is an outstanding liability of the company and is recognized as an expense in the income statement.

B) Time
 Time in the context of a promissory note refers to the duration for which the note is valid. It is the period between the date of issue and the date of maturity.

C) Proceeds (note receivable)
 Proceeds of a note receivable refer to the amount of cash received by the company in exchange for the promissory note.

D) Principal of the note
 Principal of the note refers to the original amount of the loan that has been borrowed by the issuer of the note.

E) Notes payable register
 A notes payable register is a record that contains details of all the notes payable that a company has issued. It includes information about the issuer, the principal amount, the interest rate, the maturity date, and any other relevant details.

F) Credit advice
 Credit advice is a document that is sent by a bank or other financial institution to inform its client that payment has been received from a third party.

G) Maturity value
 Maturity value is the total amount that will be paid at the end of the term of the note. It includes the principal amount and any interest that has accrued on the note.

H) Discounting a note receivable
 Discounting a note receivable refers to the practice of selling the note to a bank or other financial institution at a discount to its face value. This allows the company to receive cash immediately and transfer the risk of non-payment to the buyer of the note.

I) Dishonored
 A promissory note is said to be dishonored when the issuer of the note fails to make payment on the due date.

J) Effective rate
 Effective rate is the true rate of interest paid or earned on a loan, taking into account all fees and charges associated with the loan.

K) Promissory note
 A promissory note is a written promise to pay a specified amount of money at a specified time, usually with interest.

L) Maker
 The maker of a promissory note is the person or company that promises to pay the specified amount at the maturity date.

Match the Terms with the Definitions