IFRS only permits the use of either the FIFO or weighted average cost flow assumption.

True or False

The Palmer Corporation sells goods to its customers on a note basis with 10% credit terms and interest payable at the end of each quarter. All notes are due in one year. Palmer makes the following sales on July 1, 20X1:

Customer	Note Maturity			Interest Due	Interest Rate
J.Perez	$	100,000		Quarterly	10%
P.Berg	$	100,000			Negotiated

To encourage sales, Berg was given a special deal on interest. Additional information:

Future value of $100,000 in one year (quarterly interest) is $110,381.

Present value of $100,000 for one year (quarterly interest) is $90,595.

At the end of the first quarter, which one of the following entries will be made to record the interest earned by Palmer on the Berg note?

Multiple Choice

• DR Cash $2,500 CR Interest income $2,500

• DR Notes receivableBerg $2,265 CR Interest income $2,265

• DR Accrued interest receivable $2,500CR Interest income $2,500

• There is no entry because the note is noninterest bearing.