Use the Average Daily Balance Method to Compute the Amount

question 68

Multiple Choice

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year.
-Month: July (31 days)

• A)$10.56
• B)$12.40
• C)$10.66
• D)$10.92

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Definitions:

Revenues

The total income generated from normal business operations, often from the sale of goods and services.

Expenses

Expenses that a company incurs while generating income.

Real Account

a permanent account in the general ledger that tracks the value of a company's property, plant, equipment, and other non-current assets over time.

Permanent Account

A permanent account is an account that is not closed at the end of the accounting period and carries its balance over into the next period, such as assets, liabilities, and equity accounts.