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Fundamentals of Accountancy, Business and Management (FDNACCT)

FDNACCT 05 · Promissory Notes

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Core and hard Quiz 2 questions with complete facts, misconception-based alternatives and worked solutions.

Jade Laurence EmpleoPublic22 questionsFundamentals of Accountancy, Business and Management (FDNACCT)Updated
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Exam
7concepts
15calculations
Conventions

Amounts are Philippine pesos (₱). Use accrual accounting and periodic inventory unless explicitly stated. Interest uses annual rates with days/360 or months/12; maturity dates use actual calendar days, excluding issue date. Cash-discount cases explicitly state the course original-balance convention. Numeric answers omit currency symbols; round monetary answers to two decimal places when needed. Each question supplies its own complete facts and is independent. No VAT or period-end adjustments apply unless stated.

Questions

01The maker issues a note. Which account does the maker normally credit?
  1. Notes receivable
  2. Notes payable
  3. Interest income
  4. Drawings
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf, pp. 1–2
02What is interest for the full note term?

Problem

All amounts are Philippine pesos (₱). A 50,000 note bears 4% annual interest for 90 days. The rate is annual. Use simple interest and a 360-day year. No interest has previously been accrued or collected.

  1. ₱500
  2. ₱2,000
  3. ₱4,500
  4. ₱50,500
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
03What cash maturity value is due?

Problem

All amounts are Philippine pesos (₱). A 50,000 note bears 4% annual interest for 90 days. The rate is annual. Use simple interest and a 360-day year. No interest has previously been accrued or collected.

  1. ₱500
  2. ₱50,000
  3. ₱50,500
  4. ₱52,000
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
04What is interest for the full note term?

Problem

All amounts are Philippine pesos (₱). On June 8 a business borrows 60,000 on a 120-day note at 5%. The rate is annual. Use simple interest and a 360-day year. No interest has previously been accrued or collected.

  1. ₱1,000
  2. ₱3,000
  3. ₱600
  4. ₱1,200
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
05What is interest for the full note term?

Problem

All amounts are Philippine pesos (₱). On September 8 a business borrows 120,000 on a three-month note at 7%. The rate is annual. Use simple interest with months divided by 12. No interest has previously been accrued or collected.

  1. ₱8,400
  2. ₱2,100
  3. ₱700
  4. ₱25,200
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
06What amount is debited to Accounts receivable upon dishonor?

Problem

All amounts are Philippine pesos (₱). A business receives Sam’s 10,400 note for services rendered. The note bears 10% annual interest for 45 days. Sam dishonors it at maturity. The rate is annual. Use simple interest and a 360-day year. No interest has previously been accrued or collected. Use the course’s ordinary-account treatment of a dishonored note.

  1. ₱10,400
  2. ₱10,530
  3. ₱130
  4. ₱11,440
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
07What cash is collected at maturity?

Problem

All amounts are Philippine pesos (₱). Anna’s overdue trade account is replaced by a 20,000, two-month note bearing 12% annual interest. Anna pays the note at maturity. The rate is annual. Use simple interest with months divided by 12. No interest has previously been accrued or collected.

  1. ₱20,000
  2. ₱22,400
  3. ₱20,400
  4. ₱400
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Class Exercise.xlsx, Examples; Sheet1
08Which entry replaces a customer’s existing receivable with a note?
  1. Dr Notes receivable; Cr Accounts receivable
  2. Dr Cash; Cr Revenue
  3. Dr Accounts payable; Cr Notes payable
  4. Dr Interest expense; Cr Cash
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf, pp. 1–2
09Which amount is removed from Notes payable when the note is settled?
  1. Interest only
  2. The note’s face-value principal
  3. All business liabilities
  4. Only current-period profit
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf, pp. 1–2
10What stated face-value payment is due?

Problem

All amounts are Philippine pesos (₱). A note promises payment of 10,000 at maturity and specifies no explicit interest. This bounded introductory question assumes no discount, fees, or other financing adjustments.

  1. ₱10,000
  2. ₱10,400
  3. ₱9,600
  4. ₱400
FDNACCT_Topics.pdf, p. 2, Unit 4.5; introductory extension of face-value note examples
11A business issues a note payable due in three years, with no installment due in the next twelve months. How is that liability classified?
  1. Current payable
  2. Non-current liability
  3. Revenue
  4. Expense
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf, pp. 1–2
12What additional interest expense is recorded at payment?

Problem

All amounts are Philippine pesos (₱). Total interest for a note’s entire term is 500. Earlier adjustments already recognized 300 of that amount as Interest payable. The full note is now settled; no other interest is involved.

  1. ₱500
  2. ₱800
  3. ₱200
  4. ₱300
FDNACCT Unit 4.7_Journalizing and posting adjusting entries_Study Guide.pdf, pp. 1–5; FDNACCT_Formula Guide_Quiz #3.pdf
13What is the maturity date?

Problem

A 75-day note is issued August 19, 2026. Count actual calendar days, excluding issue date.

  1. November 1, 2026
  2. November 3, 2026
  3. November 4, 2026
  4. November 2, 2026
FDNACCT_2526_T3_Quiz #2_1_Questionnaire.pdf III.4, original analogue
14What is the maturity date?

Problem

A 60-day note is issued December 12, 2026. Exclude the issue date and use actual calendar days.

  1. February 11, 2027
  2. February 12, 2027
  3. February 10, 2027
  4. February 9, 2027
FDNACCT_2526_T2_Quiz #2_1_Questionnaire.pdf III.4, original analogue
15What is the full-term maturity value?

Problem

Principal ₱144,000; annual rate 8%; term 75 days; 360-day year; no previous interest accrual.

  1. ₱2,400
  2. ₱146,400
  3. ₱144,000
  4. ₱155,520
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf p.1; FDNACCT_2526_T3_Quiz #2_1_Questionnaire.pdf III.1–2, original analogue
16What amount is credited to Notes receivable on collection?

Problem

Payee collects a ₱96,000, 7.5% annual, eight-month note at maturity. Interest has not previously been accrued.

  1. ₱96,000
  2. ₱100,800
  3. ₱4,800
  4. ₱91,200
FDNACCT_2526_T1_Quiz #2_1_Questionnaire.pdf III.4, original analogue
17Which complete maker entry records dishonor at maturity?

Problem

A maker fails to pay a ₱84,000, 9%, 50-day note. Use course dishonor treatment and a 360-day year; no prior interest accrual.

  1. Dr AR 85,050; Cr Notes receivable 84,000; Cr Interest income 1,050
  2. Dr Notes payable 85,050; Cr AP 85,050
  3. Dr AP 85,050; Cr Cash 85,050
  4. Dr Notes payable 84,000; Dr Interest expense 1,050; Cr AP 85,050
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf p.2; FDNACCT_2526_T3_Quiz #2_1_Questionnaire.pdf III.3, original analogue
18How much does total equity decrease at payment?

Problem

The maker settles a ₱96,000, 7.5%, eight-month note. No interest was previously accrued; simple interest applies.

  1. ₱100,800
  2. ₱0
  3. ₱4,800
  4. ₱96,000
FDNACCT_2526_T1_Quiz #2_1_Questionnaire.pdf I.9, original analogue
19What is the net increase in the payee’s total assets on collection?

Problem

A payee collects a ₱144,000 note plus ₱2,400 full-term interest, none recorded previously.

  1. ₱0
  2. ₱2,400
  3. ₱146,400
  4. ₱144,000
FDNACCT_2526_T1_Quiz #2_1_Questionnaire.pdf I.10, original analogue
20What entry records receiving the note?

Problem

A customer signs a ₱38,000 face-value note to replace an existing ₱38,000 service receivable. The note does not include prepaid interest.

  1. Dr Notes receivable 38,000; Cr Accounts receivable 38,000
  2. Dr Notes receivable 38,000; Cr Service revenue 38,000
  3. Dr Cash 38,000; Cr Accounts receivable 38,000
  4. Dr Accounts receivable 38,000; Cr Notes payable 38,000
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf p.2
21Which statement about a six-month note and a 180-day note is sound?
  1. Their due dates are always identical
  2. The six-month note must use 365 as the interest denominator
  3. A 180-day note must mature in the issue month
  4. Their due dates may differ because calendar months have different lengths
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf p.1
22Which account belongs in the maker’s dishonor entry?
  1. Notes receivable, debited for face value
  2. Cash, credited for maturity value
  3. Accounts payable, credited for maturity value
  4. Accounts receivable, credited for face value
FDNACCT Unit 4.5_Journalizing transactions specific to promissory notes_Study Guide.pdf p.2; FDNACCT_2526_T2_Quiz #2_1_Questionnaire.pdf I.3
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