| A | B |
|---|
| accrual basis of accounting | The ____ recognizes revenue when earned and expenses when incurred. |
| accrued revenue | ____ is revenue earned but not yet received and recorded. |
| bank discount | The ____ is the interest charge the bank deducts in advance at the time the note is issued. |
| conservatism principle | To follow the ____, the accountant is conservative when reporting the financial condition of the company. |
| contingent liability | A(n) ____ exists when the endorser of a discounted note agrees to pay the note at maturity if it is not paid by the maker. |
| discount period | The period of time between the date the note receivable is sold to the bank and the maturity date of the note is called the ____. |
| discounting notes receivable | Selling notes receivable to a bank for cash rather than holding them until maturity is called ____. |
| dishonored note | A(n) ____ is a note that is not paid or renewed at the maturity date. |
| draft | A(n) ____ is an order by one party (the drawer) to another party (the drawee) to pay a certain sum of money to a third party (the payee). |
| face value | The amount written on the face of the note is its ____. |
| interest | ____ is the fee charged for the use of money. |
| interest-bearing note | A note that requires the principal plus interest to be repaid at maturity is called a(n) ____. |
| interest rate | The ____ is the amount of interest expressed as a percentage of the principal. |
| issue date | The ____ of a note is the date on which the note is written. |
| maker | The ____ is the person or business to whom the note is payable |
| maturity date | The specific day on which the note must be paid is its ____. |
| maturity value | The ____ of a note is the principal plus the interest that must be paid. |
| negotiable instrument | A(n) ____ is a financial document that transfers ownership from one person to another. |
| note receivable | A promissory note that a business accepts from a customer is called a(n) ____. |
| notes receivable past due | A note that has been dishonored is recorded in the ____ account. |
| payee | The ____ is the person or business to whom the note is payable. |
| principal | The ____ of a note is the amount being borrowed. |
| proceeds | The ____ is the maturity value minus the bank discount. |
| promissory note | A(n) ____ is a written promise to paya certain sum of money on a specific date. |
| protest fee | The bank charge to the endorser for a dishonored, discounted note is called the ____. |
| term | The ____ of the note is the length of time the borrower has to repay the note. |
| trade acceptance | A ____ is a special form of draft that arises from the sale of merchandise and has that fact noted on its face. |
