For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. For fill-in-the-blank questions press or click on the blank space provided.
If you have difficulty answering the following questions, learn more about this topic by reading our Present Value of an Ordinary Annuity (Explanation).
Under the accrual basis of accounting, when should the discount on notes receivable be reported as interest revenue?
Which of the following present value of an ordinary annuity (PVOA) factors are larger?
Company X received a promissory note from Corp Y. The note does not specify any interest and it requires $3,000 to be paid at the end of each year for four years. Which interest rate should Company X use to discount this note receivable to its present value?
Use the following information for answering Questions 14 - 18.
Company X's accounting year ends on December 31 of each year. On December 31, 2020 Company X received a promissory note from Corp Y in exchange for services provided by Company X. The fair market value of the services is not known and the fair market value of the note is not known. The note calls for two payments of $10,000 each: one on December 31, 2021 and one on December 31, 2022. No interest is specified in the note. Company X computed the present value of the note to be $17,000 as of December 31, 2020.
Want more practice questions?
Receive instant access to our graded Quick Tests (more than 1,800 unique test questions) when you join AccountingCoach PRO.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping. The certificates include Debits and Credits, Adjusting Entries, Financial Statements, Balance Sheet, Income Statement, Cash Flow Statement, Working Capital and Liquidity, Financial Ratios, Bank Reconciliation, and Payroll Accounting. Click here to learn more.