Use the Information Below to Answer the Following Question(s)

question 153

Multiple Choice

Use the information below to answer the following question(s) .
Lough Company prepared the following purchases budget:

All purchases are paid for as follows: 20% two months after purchase, 55% in the following month, and 25% in the month of purchase.
-What are the cash disbursements in October to account for the September purchases at Lough Company?

• A) $9,200
• B) $25,300
• C) $8,000
• D) $184,000

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold against deposits, as mandated by central banking authorities to ensure bank liquidity.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, financial regulation, and stability.

Excess Reserve

Funds that banks hold over and above the required minimum reserves mandated by central banking authorities.

Money Supply

The aggregate of all money, such as cash, deposits in banks, and liquid assets, that is present within an economy at a certain point in time.