An Account Was Opened with an Investment of $1,000 Ten

question 180

Multiple Choice

An account was opened with an investment of $1,000 ten years ago. The ending balance in the account is $1,500. If interest was compounded annually, what rate was earned on the account?

• A) 1.0%
• B) 2.2%
• C) 2.9%
• D) 3.8%
• E) 4.1%

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Definitions:

Accrued Revenue

Revenue earned but not yet received or recorded at the end of an accounting period.

Fees Earned

Revenue generated from services provided by a business during a specific period.

Accounts Receivable

This refers to the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Contra Expense Account

An account that is offset against an expense account on the income statement, effectively reducing the total expense reported.