Edgewood College Has an Evolving Loan Fund to Finance Up-Front

question 47

Multiple Choice

Edgewood College has an evolving loan fund to finance up-front costs for energy efficient improvements. Where does the money to replenish that loan come from in year ten of the loan?

• A) the school's endowment
• B) governmental tax incentives
• C) student and donor contributions
• D) savings from reduced energy consumption

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Definitions:

Sales Discounts

A reduction in the price of goods or services offered to customers, usually to prompt early payment or reward bulk purchases.

Gross Price Method

Gross Price Method involves recording inventory at its gross price, before deducting any trade discounts or rebates.

Allowance for Doubtful Accounts

An accounting concept referring to an estimate of the amount of receivables that may not be collected, which is used to reduce the total accounts receivable reported on the balance sheet.

Prior-Period Adjustments

Adjustments made to the financial statements to correct errors or omissions in previously issued financial statements from prior periods.