Answer:
D. The ability to change the cost banks have to pay to borrow money.
Explanation:
Reserve( FED) sets the discount rate and applies it on loans to commercial banks and other institutions. Commercial banks use the discount rate as the basis for determining the interest rate to charge customers for loans issued.
The discount rate is among the monetary policy tools available for use by the FED. An increase in the discount rate leads to a rise in commercial banks' loan interest rates, thereby discouraging borrowing. Reduced borrowing reduces the money supply in the economy.
Fractional reserve banking is the practice where a bank accepts deposits, makes loans or investments, but is required to hold reserves equal to only a fraction of its deposit liabilities.
The barter system is a form of trading in which goods are exchanged directly for other goods without the use of money or as an intermediary, without a medium of exchange. The invention of money supplemented the barter system by providing a nonperishable medium of exchange.
Answer:
The journal entry to record the merchandise return and the payment should be:
Dr Cash 2,940
Dr Sales discount 60
Dr Sales returns and allowances 600
Cr Accounts receivable 3,000
The second entry must be made to record the increase in inventory:
Dr Merchandise inventory 600
Cr Sales returns and allowances 600
Explanation:
The sales returns and allowances account is used to record returned merchandise, while the sales discount account is used to record discounts for early payments or other types of sales discounts.
