According to the historical cost principle, if an asset costs $50,000 when it was purchased, and the one who purchased it still owns the asset today, it will have a higher value than $50,000. If the interest rate is assumed to be 5% for 5 years, the asset will be recorded as $63,814.08.
Answer:
D.) All the temporary accounts
Explanation:
The closing entry process closes or "zeroes out" the temporary accounts and transfer their balances to the retained earnings account.
Theses temporary accounts are closed or reset at the end of every year. Companies also call this as the closing of the books.
Temporary accounts includes:
1. Revenue & Gain Accounts
2. Expenses & Losses Accounts
3. Dividends & Withdrawal Accounts
4. Income Summary accounts (if used)
Answer:
The correct answer is C. the decline in the economic value of an asset over time
Explanation:
Depreciation : Depreciation is a decreasing value of the asset due to tear and wear, obsolesce, usage, etc
It is charged on the fixed assets which include plant and machinery, furniture and fixtures, building, computer, equipment, etc.
The sum of gross and net investment is not called the depreciation because gross investment is an expenditure which is incurred on new purchase while net investment is a difference between gross investment and deprecation. So, option B is incorrect.
Depreciation should not be charged on intangible assets because in intangible asset, the amortization is charged. Thus, option B is incorrect.
The decrease in the general price level is disinflation or inflation decreased. So, option D is also wrong
Hence, The correct answer is C. the decline in the economic value of an asset over time
Answer:
Instructions are below.
Explanation:
Giving the following information:
Jill:
Weekly deposit= $96.15
The number of weeks= 30*52= 1,560
Interest rate= 0.098/52= 0.00189
Joe:
Annual deposit= $5,000
Number of years= 30 years
Interest rate= 9.8%
To calculate the final value of Jill and Joe, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= weekly/annual deposit
<u>Jill:</u>
FV= {96.15* [(1.00189^1,560)-1]} / 0.00189
FV= $916,853.88
<u>Joe:</u>
FV= {5,000*[(1.098^30)-1]} / 0.098
FV= $791,953.50
Answer:
The correct answer would be C, Balance Sheet.
Explanation:
A balance sheet is a document, which contains information about the Assets, Liabilities and owner's Equity of a firm, company or an organization. There is a predetermined format to write a Balance Sheet. There are two sides in this statement. One side contains Assets and Liabilities of the Company, whereas the other side contains the Owner's Equity in a particular point of time. This statement summarizes the financial balances of an individual organization. There are other financial statements of the company as well like Income Statement, cash flow statement, etc, but Balance Sheet is considered most appropriate to have a look at the assets, liabilities and equity of the company at a specific point of time.
