5.Compounded interest is
interest only paid on interest
interest paid on principal and interest
Interest collected on the principal
interest only paid on the principal
None of the other alternatives are correct
3?A company is obligated to make annual payments to a pension fund at the end of the next three years. The present value of those payments is to be $100,000. Which of the following amounts is nearest the amount which must be paid annually if the fund is projected to earn interest at the rate of 8% per year?
$41,990
$38,803
$33,333
$26,461
None of the other alternatives are correct
6?Which one of the following statements is true?
Interest makes a dollar today worth the same as a dollar tomorrow
Interest makes a dollar today worth less than a dollar tomorrow
Interest has no effect on the value of a dollar
None of the other alternatives are correct
Interest makes a dollar today worth more than a dollar tomorrow
5.Cell My Way Inc. previously accrued a product warranty expense of $144,000 for defective units. The balance in the Warranty Liability Account currently has a balance of $140,000. Cell My Way Inc.’s warranty covers both parts and service. Which of the following journal entry is recorded each time a unit is brought in for repair (considering parts only)?
Dr. Estimated Liability for Product Warranty. Cr. Product Warranty Expense
None of the other alternatives are correct
Dr. Estimated Liability for Product Warranty. Cr. Purchases
Dr. Estimated Liability for Product Warranty. Cr. Labour
Dr. Estimated Liability for Product Warranty. Cr. Supplies
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