Which of the Following Is the Correct Way to Compute

question 20

Multiple Choice

Which of the following is the correct way to compute the future value of $1 put into an account that earns 5 percent interest for 16 years?

• A)$1(1 + .05)¹⁶
• B)$1(1 + .0516)16
• C)$1(1 + .0516)
• D)$1(1 + 16/.05)¹⁶

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Definitions:

Deposits In Transit

Funds that have been deposited in a bank account but not yet recorded by the bank, leading to a difference between the company's records and the bank statement.

Outstanding Checks

Checks that have been written and recorded in the issuing company's books but have not yet been cleared by the bank.

Outstanding Checks

Checks that have been written and recorded in the issuing party's account but have not yet been cashed or cleared by the bank.

Reconciliation Procedure

A process used to ensure that two sets of records (usually the balances of two accounts) are in agreement, identifying discrepancies and reasons for them.