Suppose Congress Passed a Law Preventing Lenders from Charging Debtors

question 248

Multiple Choice

Suppose Congress passed a law preventing lenders from charging debtors more than a 12 percent annual interest rate. Fritz's Loan Company has one office in Orlando and only lends money to people in Florida. Fritz challenges the constitutionality of the application of the law to his business, because he conducts it all within one state. The law is probably:

• A) constitutional according to the Third Amendment
• B) unconstitutional as the Commerce Clause is interpreted
• C) unconstitutional as the Necessary and Proper Clause is interpreted
• D) unconstitutional as the Third Amendment is interpreted
• E) none of the other choices

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Definitions:

Credit Balance

An accounting balance where the sum of credits exceeds the sum of debits in an account, often indicating money owed to the account holder.

Salaries Payable

A liability account that represents the amount owed to employees for work performed but not yet paid.

Reversing Entry

An accounting entry made at the beginning of an accounting period to negate the effects of certain adjusting entries made in the previous accounting period.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.