Due:
Name:
Hour:
ACCOUNTING II
Chapter 10 Reading Guide
Answer the following questions as you read Chapter 10, pages 288-304.
10-1: NOTES RECEIVABLE
1.
What is the difference between a Notes Payable and a Notes Receivable (think back to what you
know about a Notes Payable and who owes who)?
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[2]
2.
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Why are Notes Receivable classified as current assets?
[1]
3.
There are two types of Notes Receivable a business may issue. What are they?
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[2]
4.
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A general journal is sometimes used for issuing a Notes Receivable. Other times, a cash receipts
journal is used. When is a note recorded in a General Journal? When is a note recorded in a
Cash Receipts journal?
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[2]
5.
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How is Interest Income classified?
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[1]
6.
Employers sometimes issue Notes Receivable to employees for a variety of reasons. What kind of
transactions are these known as? (See FYI, page 292)
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[1]
7.
What is a dishonored note?
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[1]
ACCOUNTING II
8.
Chapter 10 Reading Guide
What accounts are affected and how when a notes receivable is dishonored? Include debit/credit
parts.
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[3]
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9.
When a Notes Receivable is dishonored and journalized, there is a chance the amount will never
be paid back. What happens if the business thinks the note is uncollectible? (See REMEMBER
box, page 293)
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[1]
10. Sometimes a note that was dishonored is paid. What accounts are affected and how
(debit/credit)? Why is Interest Income charged again?
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[4]
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10-2: UNEARNED AND EARNED REVENUE
11. What is unearned revenue?
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[1]
12. What is unearned revenue also referred to as?
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[1]
13. A business can choose one of two ways to record unearned revenue. What are the two ways?
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[2]
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14. If a business chooses to record unearned revenue as a revenue, why must an adjusting entry be
recorded at the end of the fiscal period?
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[1]
2
ACCOUNTING II
Chapter 10 Reading Guide
15. How is Unearned Rent classified? How is Rent Income classified?
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[2]
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16. When is a reversing entry needed?
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[1]
17. What is accrued revenue?
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[1]
18. For a note issued on December 1 for 60 days, how many days of interest must be calculated in the
current fiscal period (that ends December 31)? If the note is for $1,000 at an interest rate of
12%, how much interest will be recorded in an adjusting entry (show work)?
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[2]
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19. Which account is credited for the Interest that is due from the customer, but not received? How
is this account classified?
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[2]
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20. Which account is debited for the Interest that is due from the customer, but not received? How
is this account classified?
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[2]
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21. How do reversing entries make the work of accounting personnel easier? (See REMEMBER box
on page 300)
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[1]
3