Promissory Notes Flashcards
Amount appearing in the face of the note.
Principal/Face Value
Rate appearing on the face of the note.
Interest Rate
From the date of issuance of the note up to the date of maturity.
Term/Time
Refers to the charge for borrowed money.
Interest (Principal•Rate•Time)
Amount of interest deducted by the bank in advance.
Discount (Maturity Value•Discount Rate•Discount Period)
Rate used by the bank in computing discount.
Discount Rate
The period of time form the date of discounting to maturity date.
Discount Period
Date where the note becomes due for payment.
Maturity/Due Date
Total amount due from the note upon its maturity date.
Maturity Value (Principal+Interest)
Refers to the discounted value of the note received by the endorser from the endorsee.
Net Proceeds (Maturity Value-Discount)
Date when the note is prepared by the maker.
Date of Note/Issue/Receipt
Two methods used for accounting for uncollectible accounts.
Direct Write-Off Method and Allowance Method
Method used in accounting for uncollectible accounts which does not attempt to anticipate uncollectible accounts.
Direct Write-Off Method
Method used in accounting for uncollectible accounts which requires the estimation of uncollectible accounts in the accounting period.
Allowance Method
Two acceptable methods used for estimating uncollectible accounts.
Credit Sales Method and Accounts Receivable Method
