The Interest Receivable Account for February Showed Transactions Totaling $17,000

question 21

Multiple Choice

The Interest Receivable account for February showed transactions totaling $17,000 and an adjustment of $22,400.

• A) The transactions probably resulted from accruing interest income earned.
• B) The transactions were probably entered on the credit side of the account.
• C) The adjustment was probably for cash receipts of interest receivable accrued in prior months.
• D)The balance in the interest receivable account decreased $5,400.

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Definitions:

Bond Portfolio

A collection of bonds held by an investor, designed to diversify risk and achieve specific income objectives.

Perfectly Negatively Correlated

A statistical measure indicating that two variables move in opposite directions with a correlation coefficient of -1.

Minimum-Variance Portfolio

A portfolio consisting of investments that are selected to minimize the overall volatility of the portfolio.

Standard Deviation

Standard Deviation quantifies the dispersion of a set of data points around their mean, used in finance to measure the volatility of investment returns.