Use the Following Information for Questions

question 98

Multiple Choice

Use the following information for questions.
On January 1, 2011, in an effort to lure Tar-Mart, a major discount retail chain to the area, the city of Bordeaux agreed to provide the company with a €6,000,000 three-year, Zero-interest bearing note.The prevailing rate of interest for a loan of this type is 10% and the present value of €6,000,000 at 10% for three years is €4,507,800.
-In recording the loan and grant, Tar-Mart will

• A)debit Discount on Notes Payable of €1,492,200.
• B)credit Deferred Grant Revenue €1,492,200.
• C)credit Note Payable €6,000,000.
• D)all of these.

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Definitions:

Materials Price Variance

The difference between the actual cost of raw materials used in production and the expected (or standard) cost of those materials.

Raw Materials Quantity

The amount or volume of raw materials required or used in the production process, often measured to assess inventory needs and costs.

Variance

The difference between planned or expected performance and the actual outcome.

Occupancy Expenses

Expenses associated with the use of a physical location, including lease payments, utility bills, and taxes on the property.