Dairy Farm Enters into a Contract with Edible Ice Cream

question 36

Multiple Choice

Dairy Farm enters into a contract with Edible Ice Cream Inc. to supply milk. Later, Dairy decides that it is no longer advantageous to fulfill the contract and subsequently fails to perform as promised. Edible files a suit against Dairy. A breach occurred when Dairy

• A) entered into the contract.
• B) decided that it was not advantageous to fulfill the contract.
• C) failed to perform as promised.
• D) was sued by Edible.

Understand compound interest and its application to savings and investments.

Calculate the value of perpetuities using different discount rates.

Determine the annual percentage rate (APR) for loans with monthly interest charges.

Calculate the year-end balance for investments with monthly compounding.

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.

Adjusting Entries

Bookkeeping adjustments made before the preparation of financial statements to account for accruals and deferrals not recorded through daily transactions.

Optional

Optional refers to a choice or item that is not mandatory and can be selected based on preference or requirement.

Adjusting Entries

These are journal entries made in accounting at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.