If the Interest Rate Was 6 Percent, the Net Present

question 45

Multiple Choice

If the interest rate was 6 percent, the net present value of $100 to be received one year from now would be

• A) $94.34.
• B) $98.04.
• C) $100.00.
• D) $106.00.

---

Definitions:

Liability Accounts

Accounts that represent amounts owed to creditors or bills that must be paid in the future, contributing to a company’s liabilities on the balance sheet.

Post-closing Trial Balance

A list of all company accounts that remain after adjusting and closing entries are made, used to ensure debits equal credits.

Trial Balance

A summary listing of the titles and balances of accounts in the ledger.

Drawing Account

An account used to record amounts withdrawn by the owner of a business for personal use.