You Are Scheduled to Receive $10,000 in One Year

question 80

Multiple Choice

You are scheduled to receive $10,000 in one year. What will be the effect of an increase in the interest rate on the future value of this cash flow?

• A) It will cause the future value to fall.
• B) It will cause the future value to rise.
• C) It will have no effect on the future value.
• D) The effect cannot be determined with the information provided.

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Definitions:

Unadjusted Trial Balance

A list of all the general ledger accounts along with their balances at a particular date before any adjustments are made for the end-of-period accounting.

Adjustments Columns

Columns in a worksheet used to record entries for the adjustment of accounts at the end of a period, prior to preparing financial statements.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Adjusted Trial Balance

A list of all account titles and balances after adjusting entries have been made, serving as a check before preparing financial statements.