Quiz_-2.3.3.2-Theory-Quiz-5-Notes-Loans-and-Impairment.pdf...

4/24/22, 8:14 PM Quiz: 2.3.3.2 Theory Quiz #5 - Notes, Loans and Impairment
2.3.3.2 Theory Quiz #5 - Notes, Loans and Impairment
Started: Apr 24 at 8:04pm
Quiz Instructions
The following are sets of questions of different formats like: True or False, Multiple Choice or fill in the
blanks. Please read each statement carefully.
1 pts
Question 1
On October 1, 2021, an entity received a one-year notes receivable bearing interest
at the market rate. The face amount of the notes receivable and the entire amount of
the interest are due on September 30, 2022. The interest receivable on December
31, 2021 would consist of an amount representing three months of accrued interest
income.
1/9
False
1 pts
Question 3
False
1 pts
Question 2
On July 1, 2021, an entity obtained a 2-year 8% note receivable for services
rendered. At that time, the market rate of interest was 10%. The face amount of the
note and the entire amount of interest are due on the date of maturity. Interest
receivable on December 31, 2021 is 4% of the face amount of the note.

4/24/22, 8:14 PM Quiz: 2.3.3.2 Theory Quiz #5 - Notes, Loans and Impairment
An entity uses the installment sales method to recognize revenue. Customers pay
the installment notes in 24 equal monthly amounts which include 12% interest. The
installment notes receivable balance 6 months after the sale is equal to the present
value of the remaining monthly payments discounted at 12%.
2/9
False