A certificate of deposit usually has:Multiple Choiceno set time period.a penalty for early withdrawal of funds.earnings based on fluctuating market interest rates.a variable rate of return.no minimum deposit amount. What type of account would you expect to provide the poorest yield?Multiple ChoiceOSavings account earning 4 percent compounded semiannuallyCertificate of deposit earning 4 percent compounded semiannuallyO Money market account earning 4 percent compounded monthlyO Money market fund earning 4 percent compounded monthlySavings account earning 4 percent compounded annually

Certificate of Deposit: It represents a savings product earning interest on the sum of the amount…

Answered: A certificate of deposit usually has:…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle

Section: Chapter Questions

Problem 20MCQ

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Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because a. The amount of the discount is not material. B. Most receivables can be sold to a bank or factor. C. Most short-term receivables are noninterest bearing. D. The allowance for uncollectible accounts includes a discount element.
What is a limitation common to both the current and quick ratio? * Debtors may not pay on time. Inventories may not be truly liquid. Accounts receivable may not be truly liquid. Prepaid expenses are potential sources of cash. Marketable securities are not liquid.
Which of the following increases the reported receivables in the financial statements? offsetting a credit balance in an account receivable a credit balance in an account payable adjustment to eliminate a debit balance in accounts payable a credit balance in an allowance account Short-term receivables including non-trade receivables that are currently collectible may not be discounted to their present values because their face values are normally immaterial. they are so near their maturity dates that their values do not change. present value computation is very complex. the effect of discounting may be immaterial Which of the following statements is incorrect concerning the expected credit loss model of PFRS 9? The expected credit loss model applies to all financial instruments within the scope of PFRS 9, debt and equity alike. A credit loss may be recognized on the initial recognition of a debt instrument. The measurement of loss allowance is the same in…
Which of the following is false about the discount on short-term notes payable? The Discount on Notes Payable account has a debit balance. The Discount on Notes Payable account should be reported as an asset on the balance sheet. If there is a discount on notes payable, the effective interest rate is higher than the stated discount rate. All of these are true
A deposit institution can offset its liquidity risk to reduce its net deposit drains by reducing its assets through all of the following methods except: a. Borrowing funds or issuing equity. b. Calling back its loans. c. Use cash reserve. d. Selling securities.
a bank that meets a deposit withdrawal by selling t-bills will alter: neither the asset nor liabilities side of the balance sheet the asset side of its balance sheet both the asset and liabilities side of the balance sheet the liabilities side of its balance sheet
When assessing credit losses on estimated uncollectible notes receivable, the discounted cash flow technique is often used, discounting at the current interest rate in effect when the credit loss is estimated or re-estimated. True or False True False
refers to the possibility that the debtors supported by bank credit are unable or unwilling to repay the debts on time as stipulated in the contract for various reasons, causing losses to the bank. (A) Credit risk (B) Market risk (C) Operational risk (D) Liquidity risk
A trade finance instrument not supported by bank guarantee is called O a. Irrevocable LC O b. Revocable LC O c. Forfaiting O d. Open account
Which of the following is not true about the discount on short-term notes payable? a. The Discount on Notes Payable account should be reported as an asset on the balance sheet. b. When there is a discount on a note payable, the effective interest rate is higher than the stated discount rate. c.The Discount on Notes Payable account has a debit balance. d. Discount on Notes Payable is a contra account to Notes Payable.
What is not an advantage of a Treasury (T) Note? Select one: a. Extremely liquid security. b. Loss of potential purchasing power (inflation > yield). c. An investor’s capital is secure. d. Better returns than a bank savings account.
Assume that banks aim to hold no excess reserves. The AAA bank responds to the change in its reserve position in part (b) by maximizing its loan portfolio. Under this assumption, show AAA's T-Account after it has fully adjusted to the change in its reserve position. Explain what actions occurred that caused the balance sheet to change. AAA Bank Assets Liabilities

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ISBN:

9781305080577

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Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

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South-Western College Pub