Suppose That You Have $7000 to Invest, and You Invest

question 11

Multiple Choice

Suppose that you have $7000 to invest, and you invest x dollars at 10% and the remainder at 8%. Choose the expression that represents the interest earned on the money invested at 8%.

---

Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal.

Direct Write-off Method

A method of accounting for bad debts that charges the amount directly to expense when it is determined to be uncollectible.

Allowance Account

An accounting reserve set up to account for future adjustments such as bad debts or product returns.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly written off against income at the time they are deemed non-collectable.