Calculate the Average Daily Balance for the Month of May

question 107

Short Answer

Calculate the average daily balance for the month of May of an account with a previous month's balance of $950.00 and the activity below. Assume a 31-day cycle. $\begin{array}{lll}\underline{\text { Date } }&\underline{ \text { Activity } }&\underline{ \text { Amount }} \\\text { May 4 } & \text { Purchase } & \$ 25.50 \\\text { May 10 } & \text { Purchase } & 169.25 \\\text { May 18 } & \text { Payment } & 300.00 \\\text { May 20 } & \text { Credit } & 29.99 \\\text { May 25 } & \text { Cash advance } & 100.00\end{array}$

$\text { Average Daily Balance: }$

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Quick Ratio

A financial metric that measures a company’s ability to meet its short-term obligations with its most liquid assets.

Marketable Securities

These are liquid financial instruments that can be quickly converted into cash at a reasonable price, such as stocks or bonds.

Current Ratio

It's a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year.