The correct answer is installment credit. The explanation is below.
Installment credit allows you to purchase an item and then pay for it in installments. The reason that this would be the best option for you is that you do not have the money now to make the purchase, but you are able to make smaller monthly payments in order to purchase a computer.
Installment credit is better than revolving credit for new borrowers. Revolving credit would allow you to charge additional purchases on your revolving credit account. The installment plan only finances one item, rather than like a credit card, which is how revolving credit works. You would not choose non-installment credit because this would require you to make this payment all at once in a short period of time. It would not allow you to spread the payments out over time.
Answer:
Correct answer is letter B, $2,200
Explanation:
Using accrual basis method, revenue and expenses will be recognized when incurred.
The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)
An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.
($4,800 / 24 months = $200 x 11 months = $2,200)
Answer:
The adjusting entries are given below
Explanation:
Adjusting Entries
Dec 31 (Accrued Interest) Debit Credit
Interest expense $410
Interest payable $410
Dec 31 (Service Revenue) Debit Credit
Account receivable $1,790
Service revenue $1,790
Dec 31 (Salary expense) Debit Credit
Salary expense $750
Salary payable $750
Answer: The longer the time period that funds are invested, the greater the future value.
Explanation:
When we are discussing about the time value of money, we are simply saying that it's better for one to have money today than wait till the future to have that particular amount of money. For example, if someone tells you to either collect $100 today or wait till next month to collect the $100 bill. According to the time value of money, it's better to collect it now as the person can invest with it and by the time it's a month, the value of the money will be more than $100.
The longer the time period that funds are invested, the greater the future value. This is because for example if for example one keeps $100 for 1 year at 6% per annum, the interest will be $6 for a year but if it's kept for 5 years, the simple interest will be $30.
This shows that the longer the time period that funds are invested, the greater the future value.