/* Please refer to readme.html for full Instructions Text[...]=[title,text] Style[...]=[TitleColor,TextColor,TitleBgColor,TextBgColor,TitleBgImag,TextBgImag,TitleTextAlign,TextTextAlign, TitleFontFace, TextFontFace, TipPosition, StickyStyle, TitleFontSize, TextFontSize, Width, Height, BorderSize, PadTextArea, CoordinateX , CoordinateY, TransitionNumber, TransitionDuration, TransparencyLevel ,ShadowType, ShadowColor] */ var FiltersEnabled = 1 // if your not going to use transitions or filters in any of the tips set this to 0 Text[0]=["Me Email","Click here to send me an email "] Text[1]=["","future"] Text[2]=["","Compound (or Compounded)"] Text[3]=["","factors"] Text[4]=["","periods"] Text[5]=["","present"] Text[6]=["","16 (4 years X 4 quarters per year)"] Text[7]=["","Interest Revenue (or Interest Income)"] Text[8]=["

Wrong.",""] Text[9]=["
Right!","Under the accrual basis of accounting, revenues should be reported when they are earned. In this case, the interest revenue is earned in each of the three years."] Text[10]=["
Wrong.",""] Text[11]=["
Right!","This will provide more future value because interest will be earned on interest after three months (instead of one year)."] Text[12]=["
Wrong.","Interest will not be earning interest until after one year, whereas quarterly compounding will allow interest to be earned on interest after three months."] Text[13]=["
Wrong.",""] Text[14]=["","interest rate"] Text[15]=["","5% (10% per year divided by 2 six-month periods per year)"] Text[16]=["","24 (2 years X 12 months per year)"] Text[17]=["","1% (12% divided by 12 months per year)"] Text[18]=["","$1,469.
FV of 1 = PV x FV of 1 factor for n = 5 years, i = 8% compounded annually
FV of 1 = $1,000 x 1.469
FV of 1 = $1, 469"] Text[19]=["","$14,800.
FV of 1 = PV x FV of 1 factor for n = 10 semiannual periods, i = 4% per semiannual period
FV of 1 = $10,000 x 1.480
FV of 1 = $14,800"] Text[20]=["","$2,540.
FV of 1 = PV x FV of 1 factor for n = 24 months, i = 1% per month
FV of 1 = $2,000 x 1.270
FV of 1 = $2,540"] Text[21]=["","$1,373.
FV of 1 = PV x FV of 1 factor for n = 16 quarters, i = 2% per quarter
FV of 1 = $1,000 x 1.373
FV of 1 = $1,373"] Text[22]=["","12%.
FV of 1 = PV x FV of 1 factor for n = 15 years, i = ??% compounded yearly
$5,474 = $1,000 x FV of 1 factor for n = 15 yrs, i = ??% compounded yearly
5.474 = FV of 1 factor for n = 15 yrs, i = ??% compounded yearly
Look only in the row, n = 15, and locate the factor 5.474. It is in the column where i = 12%."] Text[23]=["","8%.
FV of 1 = PV x FV of 1 factor for n = 16 quarters, i = ??% per quarter
$1,373 = $1,000 x FV of 1 factor for n = 16 qtrs, i = ??% per quarter
1.373 = FV of 1 factor for n = 16 qtrs, i = ??% per quarter
Look only in the row, n = 16, and locate the factor 1.373. It is in the column where i = 2%. This means that the rate per quarter is 2%. Since the question is asking for the annual rate, multiply the rate per quarter times 4 to arrive at 8% per year."] Text[24]=["","12 years.
FV of 1 = PV x FV of 1 factor for n = ?? six-month periods, i = 4% semiannually
$2,563 = $1,000 x FV of 1 factor for n = ?? six-month periods, i = 4% semiannually
2.563 = FV of 1 factor for n = ?? six-month periods, i = 4% semiannually
Look only in the column, i = 4%, and locate the factor 2.563. It is in the row where n = 24. This means that the number of six-month periods is 24, and that equals 12 years."] Text[25]=["",""] Text[26]=["",""] Text[27]=["",""] Text[28]=["",""] Text[29]=["",""] Text[30]=["",""] Text[31]=["","journal"] Text[32]=["","entry"] Text[33]=["","account"] Text[34]=["","general"] Text[35]=["","trial balance"] Text[36]=["","bookkeeper"] Text[37]=["","software"] Text[38]=["","errors"] Text[39]=["","double"] Text[40]=["Right!",""] Text[41]=["Wrong.",""] Text[42]=["Wrong.",""] Text[43]=["Right!",""] Text[44]=["Right!",""] Text[45]=["Wrong.",""] Text[46]=["Wrong.",""] Text[47]=["Right!",""] Text[48]=["Right!",""] Text[49]=["Wrong.",""] Text[50]=["Wrong.",""] Text[51]=["Right!",""] Text[52]=["Right!",""] Text[53]=["Wrong.",""] Text[54]=["","Payable"] Text[55]=["","chart"] Text[56]=["","income statement"] Text[57]=["","accountant"] Text[58]=["",""] Text[59]=["",""] Text[60]=["",""] Text[61]=["","Owner's Equity or Stockholders' Equity (if a corporation)"] Text[62]=["Right!","The company's asset account Cash increases."] Text[63]=["Wrong.",""] Text[64]=["Wrong.",""] Text[65]=["Wrong.","Liabilities are not involved in this transaction."] Text[66]=["Wrong.","Liabilities are not involved in this transaction."] Text[67]=["Right!","Liabilities are not involved in this transaction."] Text[68]=["Right!","The proprietor's Capital account increases. (If the company is a corporation, then the Common Stock account(s) will increase.)"] Text[69]=["Wrong.",""] Text[70]=["Wrong.",""] Text[71]=["Wrong.",""] Text[72]=["Right!","The company's asset account Cash will decrease."] Text[73]=["Wrong.",""] Text[74]=["Wrong.","Liabilities are not involved in this transaction."] Text[75]=["Wrong.","Liabilities are not involved in this transaction."] Text[76]=["Right!","Liabilities are not involved in this transaction."] Text[77]=["Wrong.",""] Text[78]=["Right!","The proprietorship's owner's equity decreases by an entry to the Drawing account. If the company is a corporation, Stockholders' Equity will decrease by an entry to Retained Earnings or to Dividends. "] Text[79]=["Wrong.",""] Text[80]=["Right!","The company's asset account Cash increases."] Text[81]=["Wrong.",""] Text[82]=["Wrong.",""] Text[83]=["Right!","The company's liabilities (such as Notes Payable or Loans Payable) have increased."] Text[84]=["Wrong.",""] Text[85]=["Wrong.",""] Text[86]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[87]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[88]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[89]=["Wrong.",""] Text[90]=["Right!","The company's asset Cash decreased."] Text[91]=["Wrong.",""] Text[92]=["Wrong.",""] Text[93]=["Right!","The company's liabilities (such as Notes Payable or Loans Payable) have decreased."] Text[94]=["Wrong.",""] Text[95]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[96]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[97]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[98]=["Right!","The asset account Equipment increases, and another asset is also affected."] Text[99]=["Right!","The asset account Cash decreases, and another asset is also affected."] Text[100]=["Right and Wrong.","One asset increased and one asset decreased. Since the amounts are identical, there is no change to the total amount of assets."] Text[101]=["Wrong.","Liabilities are not involved in this transaction."] Text[102]=["Wrong.","Liabilities are not involved in this transaction."] Text[103]=["Right!","Liabilities are not involved in this transaction."] Text[104]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[105]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[106]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[107]=["Right!","An asset such as Trucks increased."] Text[108]=["Wrong.",""] Text[109]=["Wrong.",""] Text[110]=["Wrong.","Liabilities are not involved in this transaction."] Text[111]=["Wrong.","Liabilities are not involved in this transaction."] Text[112]=["Right!","Liabilities are not involved in this transaction."] Text[113]=["Right!","The proprietor's Capital account increased. (If the company is a corporation, then the Common Stock account(s) would increase.)"] Text[114]=["Wrong.",""] Text[115]=["Wrong.",""] Text[116]=["Right!","The company's asset account Supplies increases."] Text[117]=["Wrong.",""] Text[118]=["Wrong.",""] Text[119]=["Right!","The company's liabilities (Accounts Payable) increased."] Text[120]=["Wrong.",""] Text[121]=["Wrong.",""] Text[122]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[123]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[124]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction. Owner's (Stockholders') Equity will be reduced when the supplies are used."] Text[125]=["Right!","The asset Land has increased. (Two other accounts are also involved.)"] Text[126]=["Right!","The asset Cash has decreased. (Two other accounts are also involved.)"] Text[127]=["Wrong.","The balances of two asset accounts have changed."] Text[128]=["Right!","Liabilities (Notes Payable account) have increased."] Text[129]=["Wrong.",""] Text[130]=["Wrong.",""] Text[131]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[132]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[133]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[134]=["Right!","The asset Accounts Receivable increased. "] Text[135]=["Wrong.",""] Text[136]=["Wrong.",""] Text[137]=["Wrong.","Liabilities are not involved in this transaction."] Text[138]=["Wrong.","Liabilities are not involved in this transaction."] Text[139]=["Right!","Liabilities are not involved in this transaction."] Text[140]=["Right!","Revenues cause Owner's (Stockholders') Equity to increase. (In a proprietorship the owner's Capital account will increase. In a corporation the Retained Earnings account will increase.)"] Text[141]=["Wrong.",""] Text[142]=["Wrong.",""] Text[143]=["","One asset Cash increases while another asset Accounts Receivable decreases. Since the accounts will change by the same amount, the total amount of assets will not change."] Text[144]=["","One asset Cash increases while another asset Accounts Receivable decreases. Since the accounts will change by the same amount, the total amount of assets will not change."] Text[145]=["","One asset Cash increases while another asset Accounts Receivable decreases. Since the accounts will change by the same amount, the total amount of assets will not change."] Text[146]=["Wrong.","Liabilities are not involved in this transaction."] Text[147]=["Wrong.","Liabilities are not involved in this transaction."] Text[148]=["Right!","Liabilities are not involved in this transaction."] Text[149]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[150]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[151]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[152]=["Wrong.","Assets are not involved in this transaction."] Text[153]=["Wrong.","Assets are not involved in this transaction."] Text[154]=["Right!","Assets are not involved in this transaction."] Text[155]=["Right!","Liabilities increase because Accounts Payable is a liability."] Text[156]=["Wrong.",""] Text[157]=["Wrong.",""] Text[158]=["Wrong.",""] Text[159]=["Right!","An expense will cause Owner's (Stockholders') Equity to decrease."] Text[160]=["Wrong.",""] Text[161]=["Wrong.",""] Text[162]=["Right!","The asset Cash will decrease."] Text[163]=["Wrong.",""] Text[164]=["Wrong.",""] Text[165]=["Right!","Liabilities will decrease, since Accounts Payable is a liability."] Text[166]=["Wrong.",""] Text[167]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[168]=["Wrong.","Owner's (Stockholders') Equity is not involved in this transaction."] Text[169]=["Right!","Owner's (Stockholders') Equity is not involved in this transaction."] Text[170]=["Wrong.","Expenses will cause owner's equity to decrease."] Text[171]=["Wrong.","Owner's draws will cause owner's equity to decrease."] Text[172]=["Right!","Revenues will cause owner's equity to increase."] Text[173]=["Wrong.","Net income will cause owner's equity to increase."] Text[174]=["Right!","A net loss will cause owner's equity to decrease."] Text[175]=["Wrong.","Revenues will cause owner's equity to increase."] Text[176]=["Wrong.",""] Text[177]=["","Not the best answer."] Text[178]=["Right!","Every transaction will affect two or more accounts."] Text[179]=["","Retained Earnings"] Text[180]=["","dividends "] Text[181]=["","balance sheet"] Text[182]=["","income statement"] Text[183]=["",""] Text[184]=["",""] Text[185]=["",""] Text[186]=["",""] Text[187]=["",""] Text[188]=["",""] Text[189]=["",""] Text[190]=["",""] Text[191]=["Right!",""] Text[192]=["Wrong.",""] Text[193]=["Wrong.",""] Text[194]=["Right!","The financial statements do not report the fair market value."] Text[195]=["","accrual"] Text[196]=["","audited"] Text[197]=["Wrong.","The AICPA is not a government agency."] Text[198]=["Wrong.","The FASB is not a government agency."] Text[199]=["Wrong.","This government agency is associated with income tax reporting."] Text[200]=["Right!",""] Text[201]=["Wrong.",""] Text[202]=["Right!",""] Text[203]=["Wrong.","This is a government agency."] Text[204]=["Wrong.","This is a government agency."] Text[205]=["","GAAP"] Text[206]=["","Securities and Exchange Commission"] Text[207]=["","Financial Accounting Standards Board"] Text[208]=["","generally accepted accounting principles"] Text[209]=["","Double"] Text[210]=["","debited"] Text[211]=["","Liabilities"] Text[212]=["","principles"] Text[213]=["","income"] Text[214]=["","revenues"] Text[215]=["","asset"] Text[216]=["","payable"] Text[217]=["","equivalents"] Text[218]=["","operating"] Text[219]=["",""] Text[220]=["",""] Text[221]=["","discount"] Text[222]=["Wrong.",""] Text[223]=["Wrong.",""] Text[224]=["Right!","$800 minus 1% of $800 = $800 minus $8 = $792."] Text[225]=["Wrong.",""] Text[226]=["Wrong.",""] Text[227]=["Right!","$800 minus $100 = $700 minus 1% of $700 = $693."] Text[228]=["Wrong.",""] Text[229]=["Wrong.",""] Text[230]=["Wrong.",""] Text[231]=["Wrong.",""] Text[232]=["Wrong.",""] Text[233]=["Right!","2% for paying 20 days early = an annual rate of 36%."] Text[234]=["","destination"] Text[235]=["Right!",""] Text[236]=["Wrong.",""] Text[237]=["Wrong.",""] Text[238]=["Right!",""] Text[239]=["Wrong.","The allowance account must be a zero or credit balance when reported on the balance sheet."] Text[240]=["Right!",""] Text[241]=["Right!",""] Text[242]=["Wrong.",""] Text[243]=["Wrong.",""] Text[244]=["Right!",""] Text[245]=["Right!",""] Text[246]=["Wrong.",""] Text[247]=["Wrong.",""] Text[248]=["Right!",""] Text[249]=["Wrong.","Bad Debts Expense (an account that is closed at the end of each year) reports the amount pertaining to the period of time shown in the heading of the income statement. The allowance account (a permanent account that does not close at the end of each year) reports the amount that pertains to the balance in Accounts Receivable."] Text[250]=["Right!",""] Text[251]=["Wrong.",""] Text[252]=["Right!","The present credit balance of $8,000 must become a credit balance of $20,000. Therefore a credit of $12,000 must be entered in the Allowance account (and a debit of $12,000 must be entered in the Bad Debts Expense account)."] Text[253]=["Wrong.",""] Text[254]=["Wrong.",""] Text[255]=["Right!","Amount needed in Allowance is $20,000 minus the present amount of $18,000 = $2,000 additional credit needed in Allowance. The entry will therefore require a debit of $2,000 to Bad Debts Expense."] Text[256]=["Wrong.",""] Text[257]=["Wrong.",""] Text[258]=["Wrong.",""] Text[259]=["Wrong.",""] Text[260]=["Wrong.",""] Text[261]=["Wrong.",""] Text[262]=["Wrong.",""] Text[263]=["","$500: $500,000 times 0.001"] Text[264]=["","$500"] Text[265]=["","$600: $600,000 times 0.001"] Text[266]=["","$0: Since none of the accounts are due for several weeks, it is unlikely that an account will have been written off."] Text[267]=["","$1,100: $500 + $600."] Text[268]=["Right!",""] Text[269]=["Wrong.",""] Text[270]=["Wrong.",""] Text[271]=["Wrong.",""] Text[272]=["Right!",""] Text[273]=["Wrong.",""] Text[274]=["Wrong.",""] Text[275]=["Wrong.",""] Text[276]=["Right!",""] Text[277]=["Wrong.",""] Text[278]=["Wrong.",""] Text[279]=["Right!",""] Text[280]=["","aging"] Text[281]=["","sales"] Text[282]=["","360 or 365"] Text[283]=["","realizable"] Text[284]=["","factor"] Text[285]=["Wrong.",""] Text[286]=["Right!","The present debit balance of $3,000 must become a credit balance of $20,000. Therefore a credit entry of $23,000 is needed in the Allowance account (and a debit of $23,000 to Bad Debts Expense)."] Text[287]=["",""] Text[288]=["",""] Text[289]=["",""] Text[290]=["",""] Text[291]=["",""] Text[292]=["",""] Text[293]=["",""] Text[294]=["",""] Text[295]=["",""] Text[296]=["",""] Text[297]=["",""] Text[298]=["",""] Text[299]=["",""] Text[300]=["Wrong.",""] Text[301]=["Right!",""] Text[302]=["Right!",""] Text[303]=["Wrong.",""] Text[304]=["Wrong.",""] Text[305]=["Right!",""] Text[306]=["Right!",""] Text[307]=["Wrong.",""] Text[308]=["Wrong.",""] Text[309]=["Right!",""] Text[310]=["Wrong.",""] Text[311]=["Right!",""] Text[312]=["Right!",""] Text[313]=["Wrong.",""] Text[314]=["Right!",""] Text[315]=["Wrong.",""] Text[316]=["Right!",""] Text[317]=["Wrong.",""] Text[318]=["Right!",""] Text[319]=["Wrong.",""] Text[320]=["Right!",""] Text[321]=["Wrong.",""] Text[322]=["Wrong.",""] Text[323]=["Right!",""] Text[324]=["Wrong.",""] Text[325]=["Wrong.",""] Text[326]=["Wrong.",""] Text[327]=["Right!",""] Text[328]=["Wrong.",""] Text[329]=["Wrong.",""] Text[330]=["Wrong.",""] Text[331]=["Right!",""] Text[332]=["Wrong.",""] Text[333]=["Right!",""] Text[334]=["","$102,000.
$100,000 X 100% = $100,000 + $2,000 of accrued interest. Accrued interest is $100,000 X 12% X 2/12 = $2,000."] Text[335]=["","$100,000.
(Par, maturity, face amount)"] Text[336]=["","$2,000.
The accrued interest of $100,000 X 12% X 2/12 = $2,000."] Text[337]=["","$104,000.
$100,000 X 104% = $104,000 + $0 accrued interest."] Text[338]=["","$100,000.
(Par, maturity, face amount)"] Text[339]=["","Premium on Bonds Payable or Bond Premium "] Text[340]=["","$4,000.
$100,000 X 104% = $104,000 minus $100,000 of face = $4,000 of bond premium. Or, 4% premium X $100,000 = $4,000."] Text[341]=["","$10,000.
$100,000 X 10% = $10,000."] Text[342]=["","$9,500.
$10,000 of interest payments minus $500 of amortization of premium (5% premium X $100,000 = $5,000 of total bond premium divided by the bond's life of 10 years = $500)."] Text[343]=["","4%.
Market interest rate of 8% per year divided by 2 six-month periods per year = 4% per semiannual period."] Text[344]=["","$96,000.
$100,000 X 96% = $96,000 + $0 accrued interest."] Text[345]=["","$3,840.
Market interest rate per semiannual period of 4% X bond's carrying value of $96,000 = $3,840."] Text[346]=["","$80,000.
$100,000 X 8% = $8,000 per year X 10 years = $80,000. Also $4,000 semiannually for 20 semiannual periods = $8,000."] Text[347]=["","$88,000.
$100,000 X 8% = $8,000 of interest payments per year X 10 years = $80,000 + bond discount of $8,000 = $88,000."] Text[348]=["",""] Text[901]=["","The answer will be displayed here."] Style[0]=["white","black","#000099","#E8E8FF","","","","","","","","","","",200,"",2,2,10,10,51,1,0,"",""] Style[1]=["white","black","#cc0000","#ffffff","","","","","","","center","",2,2,350,"",2,2,10,15,"","","","",""] Style[2]=["white","black","#cc0000","#f4f4f4","","","","","","","center","",2,2,590,"",2,2,10,10,"","","","",""] Style[3]=["white","black","#cc0000","#f4f4f4","","","","","","","center","",2,2,100,"",2,2,0,15,"","","","",""] Style[4]=["white","black","#cc0000","#f4f4f4","","","","","","","center","",2,2,700,"",2,2,10,10,"","","","",""] Style[5]=["white","black","#cc0000","#f4f4f4","","","","center","","","","",2,2,250,"",2,2,5,15,"","","","",""] Style[6]=["white","black","#cc0000","#f4f4f4","","","","center","","","","",2,2,150,"",2,2,5,5,"","","","",""] Style[7]=["white","black","#cc0000","#f4f4f4","","","","","","","","",2,2,350,"",2,2,0,20,"","","","",""] Style[8]=["white","black","#cc0000","#f4f4f4","","","","","","","","",2,2,350,"",2,2,5,20,"","","","",""] Style[9]=["white","black","#cc0000","#f4f4f4","","","","","","","center","",2,2,100,"",2,2,10,10,"","","","",""] Style[10]=["white","black","#cc0000","#f4f4f4","","","","center","","","","",2,2,175,"",2,2,5,15,"","","","",""] Style[11]=["white","black","#cc0000","#f4f4f4","","","","center","","","","",2,2,350,"",2,2,5,15,"","","","",""] Style[12]=["white","black","#000099","#E8E8FF","","","","","","","","","","",200,"",2,2,40,10,"","","","",""] applyCssFilter()