Answered: Explain the characteristics of a bill…

Explain the characteristics of a bill of exchange and state the ways a bill of exchange Inay be discharged. b) Under what circumstances Ina)' a cheque be dishonoured?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 14Q: What business circumstance could bring about a short-term note payable created from a purchase?

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a) Explain the characteristics of a bill of exchange and state the ways a bill of exchange Inay be discharged.

b) Under what circumstances Ina)' a cheque be dishonoured?

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What business circumstance could bring about a short-term note payable created from a purchase?
When does a company record the transfer of accounts receivable as a sale? As a secured borrowing (a liability)?
If a bill of exchange is discounted and on the date of maturity such bill of exchange was dishonored by the acceptor, what will the bank do to collect such amount?
When should the transfer of receivables be recorded as a sale?
Which of the following is true when accounts receivable are factored without recourse? a. The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. b. The financing cost (interest expense) should be recognized ratably over the collection period of the receivables. c. The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables. d. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.
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* :Maker is The party to whom the payment is to be made in a promissory note The party making the promise to pay in a promissory note Both answers are true O
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How will the lender of the promissory note record the note on its books? as an expense as revenue as an asset as a contra asset
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Which accounts are remeasured (versus translated) using current exchange rates? Select one: a. All current assets and liabilities b. All assets and liabilities All revenues and expenses d. Cash, receivables, and most liabilities e. All noncurrent assets and liabilities C.
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