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3 years ago

Fiat money has an alternative use as an economic good, while commodity money did not. True or false

Business

1 answer:

Drupady [299]3 years ago

4 0

Answer:

False

Explanation:

Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods.

Fiat money is a currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value.

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Margaret puts money into her savings account each month. in this example money is functioning as a

astraxan [27]

Answer: a store of value

4 0

2 years ago

Allegheny Company ended Year 1 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $68,000 and $3450, re

prohojiy [21]

Answer:

What amount will Allegheny report as bad debts Expense on its Year 2 income statement?

Dr Bad Debt Expense $ 8,250

Cr Allowance for Uncollectible Accounts $ 8,250

Explanation:

Balances in Accounts Receivable and Allowance for Doubtful Accounts of:

Dr Accounts receivable $ 68,000

Cr Allowance for Uncollectible Accounts $ 3,450

Allegheny write off $6300 of Uncollectible Accounts.

Dr Allowance for Uncollectible Accounts $ 6,300

Cr Accounts receivable $ 6,300

Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $5,400

Dr Bad Debt Expense $ 8,250

Cr Allowance for Uncollectible Accounts $ 8,250

Because the company already has a DEBIT balance ($2,850) in the Allowance for Doubtful Accounts

it's necessary to register an entry that COMPENSATE ($8,250) the existing value and reflect the value estimated as bad debts ($5,400 = $8,250-$2,850).

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of estimated value.

Bad accounts are those credits granted by the company and there is no possibility of being charged.

"When customers buy products on credits but the company cannot collect the debt, then it's necessary to cancel the unpaid invoice as uncollectible."

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets .

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit) with accounts receivable (credit), with this we are recognizing the bad credit of the company.

8 0

3 years ago

On June 15, Kersee Company sold merchandise on account to Eng Co. for $1,000, terms 2/10, n/30. On June 20, Eng Co. returns merc

Nookie1986 [14]

Answer:

The amount received on June 24 is $686

Explanation:

given data

sold account = $1,000

terms = 2/10, n/30

returns merchandise = $300

to find out

amount of cash received on June 24

solution

we know here that payment is made within the discount period

that is discount period = 10 days

so amount received will be here

amount received = sold account - returns

amount received = $1000 - $300

amount received = $700

and discount is here

discount = 2% of amount received

discount = 2% × $700

discount = $14

amount of cash received is = amount received - discount

amount of cash received is = $700 - $14

amount of cash received is $686

8 0

3 years ago

An investor enters into a short oil futures contract when the futures price is $15.5 per barrel. The contract size of 100 barrel

Nikolay [14]

Answer:

$150

Explanation:

Calculation to determine How much does the investor gain or lose if the oil price at the end of the contract equals $14.0

Using this formula

Gain or Loss =(Futures price- Ending contract)*Contract size

Let plug in the formula

Gain or Loss=$15.5 per barrel- $14.0* 100 barrels

Gain or Loss=$1.5*100

Gain or Loss=$150

Therefore How much does the investor gain or lose if the oil price at the end of the contract equals $14.0 will be $150

3 0

3 years ago

Suppose the September Eurodollar futures contract has a price of 96.4. You plan to borrow $50m for 3 months in September at LIBO

bija089 [108]

Answer:

Explanation:

Definition of simple terminologies ;

A contractual agreement is an agreement which is made on future exchanges in order to buy or sell goods at a fixed price at a specified time period.

LIBOR stands for London interbank offered rate which is the rate at which banks borrow money from other banks in london market. this rate is a fixed term by the british bankers association.

a) The implied LIBOR of the September Eurodollar futures of 96.4 is = 100 96.4 /400-=0.9%

(b) As we want to borrow money, it implies buying protection against high interest rates, which means low Eurodollar future prices. We will short the Eurodollar contract.

c) Number of contact to be entered into = One Eurodollar contract which is based on a $1 million 3-month deposit. As such, entering into hedge a loan of $50M, will automatically implies entering into 50 short contracts.

d) A true 3-month LIBOR of 1% means an annualized position (annualized by market conventions) of 1% x 4 = 4%. Therefore, our 50 short contracts will pay: [96.4 − (100 − 4) × 100 × $25] × 50 = $50,000.

The increased interest rate has made the loan more expensive as such, the loss to exposure will be compensated hence we have to pay the following amount ; ($50,000,000 x 0.01) - $50,000

= $450,000

6 0

2 years ago