if the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series
True
What is a discount(or interest) rate?
An interest rate is the rate of return the present value of the series can over as an interest over the investment time horizon.
On the premise that the interest rate is positive, it means that there would positive value-added over the investment period which increases the present value to ensure that the future value exceeds the present value
In other words, a positive discount or interest ensures a higher future value
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If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, this error be treated on the bank reconciliation--- Subtract $45 from the book balance.
What is bank reconciliation?
Bank Reconciliation is an important process in accounting in which organizations match their bank statements with the transactions that are recorded in their general ledger. Preparing a bank reconciliation statement helps businesses to eliminate possible errors in transactions or bookkeeping
What is the journal entry for bank reconciliation?
The journal entries for the bank fees would debit Bank Service Charges and credit Cash. The journal entry for a customer's check that was returned due to insufficient funds will debit Accounts Receivable and will credit Cash.
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Answer and Explanation:
The preparation of the cost of goods sold is presented below:
Cost of goods sold statement
Opening inventory $17,200
Add:
Purchase $149,000
Freight in -$4,350
Less:
Purchase Return -$2,000
Less:
Closing inventory -$23,000
Cost of goods sold $136,850
A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of <u>"0.4".</u>
Price Elasticity of Demand (PED) is characterized as the responsiveness of amount requested to an adjustment in cost. The interest for an item can be versatile or inelastic, contingent upon the rate of progress in the interest regarding the adjustment in the cost.
Price Elasticity of Demand (PED) = percentage in Q.D / percentage change in price
by putting the given values in formula;
PED = 2/5 = 0.4
Answer:
$91,500
Explanation:
Given that cash collection pattern is as follows; month of sale, 75%; month following the month of sale, 20%; and a 2% discount for cash collections in the month of sale, it means that cash estimated for collection in December will include;
- 75% sales in December (net of the 2% discount to be given)
- 20% sales in November
Discount for December cash collection
= 2% * 75% * $100,000
= $1500
Hence, net cash estimated to be collected in December
= 75% * $100,000 + 20% * 90,000 - $1500
= $75,000 + $18,000 - $1500
= $91,500
