Hector Puts $150 into an Account When the Interest Rate

question 107

Multiple Choice

Hector puts $150 into an account when the interest rate is 4 percent.Later he checks his balance and finds he has about $168.73.How long did Hector wait to check his balance?

• A)3 years
• B)3.5 years
• C)4 years
• D)4.5 years

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Definitions:

Allowance for Doubtful Accounts

An accounting provision made to accommodate likely losses on accounts receivable due to customers being unable to pay.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period for more accurate financial statements.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered or used but not yet paid for.

Sales

The total amount charged customers for merchandise sold, including cash sales and sales on account.