Answer: B. 1/R, where R represents the reserve ratio for all banks in the economy.
Explanation:
The Money Multiplier is the money that Banks generate given a certain RESERVE REQUIREMENT/RATIO.
A Reserve Requirement is money that the Central Bank requires that Banks do not loan out and instead keep in reserve.
For example, if the reserve rate is 10% and a bank has $10 they can only loan out $9.
Assuming they loan out $9 then they created $19 in the economy because their customers still own the original $10 but now they have also given loans of $9. The people who take the loans then deposit it in another bank. That bank would keep $0.90 in reserve and loan out $8.10 meaning that $27.10 now exists in the economy.
The process goes on and on until it gets to $100.
A simpler way to get to the final figure is to divide 1 by the reserve requirement = 1/r which is the money multiplier.
Using the above example, that would be 1/0.1 which is 10.
Multiplying this 10 by the initial deposit of $10 will give you that same $100.
Answer:
A. $ 4,123
Explanation:
For accounting purposes we will consider as cost to ivnentory all the necessarycost incurred to get the merchandise ready for use. Therefore the returns and dsicount decrease the inventory as they weren't cost incurred.
The freight will count as necessary and incurred thus, added.
Invoice nominal 4,800
returns
4,800 x 20% = <u> (960)</u>
balance 3,840
discount 2% <u> (76.8) </u>
merchandise cost 3.763,2
freights-in <u> 360 </u>
total cost 4,123.2
Answer: Controller
Explanation: Controller refer to the accounting officer of the company whose job is to analyze and interpret the transactions related to accounting and fiance.
The duties of controller include conducting internal audit, updating financial statements, filing tax applications on time etc.
Thus, from the above we can conclude that the correct option is B.
Answer and Explanation:
The journal entries are shown below:
1 Investment in Tran Corp $210,000
To Investment Income (280,000 ÷ 800,000 × $600,000) $210,000
(Being the investment in Tran corp. is recorded)
For recording this we debited the investment in tran corp as it increased the assets and credited the investment income as it also increased the revenue
2 Cash (280,000 × $0.50) $140,000
To Investment in Tran Corp $140,000
(Being the payment of cash dividend is recorded)
For recording this we debited the cash as it increased the assets and credited the investment in tran corp as it decreased the assets
(B) The equity method is appropriate as the Herrera owns 35% which come from
= $280,000 ÷ $800,000
= 35%
And it can be exercised when there is a significant influence or effect over the investor
