Answer the following statements true (T) or false (F)
1. The payee of a note is also called the creditor.
2. When counting the days of a note, one should remember to count the day the note was issued.
3. Using a 360-day year, the maturity value of a 60-day note for $5,000 at 8% annual interest is $67.
4. Silverfish, Inc. accepted a promissory note on a $3,300 Accounts Receivable balance. If they issued a four-month, 7% note, the interest on the note would be $77.
5. Another name for the quick ratio is the acid-test ratio.
1. TRUE
2. FALSE
3. FALSE Explanation: to be true, would add the $67 interest to the principal of $5,000
4. TRUE Explanation: note amount ($3,300) × interest (7%) × time (4/12) = $77
5. TRUE
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