If a Father and Mother Set Aside a Certain Amount

question 55

Multiple Choice

If a father and mother set aside a certain amount each year for their daughter's college fund, which table would be used to determine the amount necessary to be put away each year in order to reach a certain goal once the daughter attends college?

• A) The present value of $1
• B) The future value of $1.
• C) The future value of an annuity of $1.
• D) Present value of an annuity of $1.

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Definitions:

Debit Memo

A document issued to record a reduction in the balance due from a customer, often due to a return or correction.

Gross Profit

The difference between revenue and the cost of goods sold before expenses.

Single-Step Income Statement

An income statement format that calculates net income using a single subtraction of total expenses from total revenue.

Fiscal Year

A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting, which does not necessarily coincide with the calendar year.