To Establish Lump Sum Shortfall from the Amount of Payouts

question 7

Multiple Choice

To establish lump sum shortfall from the amount of payouts when performing retirement needs calculations,which of the following rates do we use?

• A)Investment rate
• B)Inflation rate
• C)Real rate
• D)Both a and b
• E)Both b and c

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Definitions:

Credit

The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Supplies Account

An account used in accounting to keep track of the amount spent on supplies not yet used or consumed by the business.

Supplies Expense

The cost incurred from the consumption of supplies that are used in the operations of a business.

Adjusting Entry

An accounting entry made at the end of a period to allocate income and expenditure to the appropriate accounting period.