You Have Been Offered a Credit Card with an Interest

question 55

Multiple Choice

You have been offered a credit card with an interest rate of 1.5% per month. This is equivalent to and effective annual rate (EAR) of

• A) 12.17%.
• B) 18.00%.
• C) 24.00%.
• D) 19.56%.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the correct period.

Revenue Accounts

Accounts that track the income earned by a company from its normal business operations or other activities.

Salaries and Wages Payable

Obligations due to employees for completed work that hasn't been compensated yet.

Payroll

The total amount of wages and salaries paid by a business to its employees for a set period of time.