Which of the Following Is the Equivalent of $300 Received

question 102

Multiple Choice

Which of the following is the equivalent of $300 received today?

• A)$795.99 to be received 20 years in the future assuming a 5 percent annual interest rate.
• B)$100 to be received two years from now and $200 three years from now.
• C)$300 compounded at 10 percent for one year.
• D)All of these are the equivalent of $300 received today.

Comprehend the effects of specific business transactions on the statement of cash flows.

Identify how noncash transactions are reported in financial statements.

Apply the indirect method to prepare the operating activities section of the statement of cash flows.

Apply knowledge of accounting principles to calculate cash payments and cash receipts from operating activities using the direct method.

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Definitions:

Income Summary Account

An income summary account is an account used in the closing process that temporarily holds the balances of all income and expense accounts before transferring the net result to capital or retained earnings.

Net Loss

The amount by which company expenses exceed its revenues over a specified period, indicating a loss in financial performance.

Post-Closing Trial Balance

A list of all accounts still open after closing entries are made, used to ensure that debits equal credits.

Capital

The wealth in the form of money or other assets owned by a person or organization, or available for a purpose such as starting a company or investing.