The matching principle requires recognizing expenses in the period in which the related revenues are earned, regardless of when cash is paid.

An increase in a liability account is recorded by a debit entry.

Which type of account is ‘Accounts Receivable’?

Dividends reduce owners’ equity and do not affect the income statement when declared.

Which results in a lower total interest​ charge, borrowing ​$960 to be repaid 12 months later as a​ single-payment loan or borrowing ​$960 to be repaid as a​ 12-month installment​ loan? Assume a simple interest method of calculation at 11.75 percent interest. The amount of interest on the​ single-payment loan is _______ and the amount of interest on the​ 12-month installment loan is ​_________.

Joetta Hernandez is a single parent with two children and earns ​$50,100 a year. Her​ employer’s group life insurance policy would pay 2.5 times her salary. She also has ​$66,800 saved in a​ 401(k) plan, ​$5,567 in mutual​ funds, and a ​$3,340 certificate of deposit. She wants to purchase term life insurance for 15 ​years, until her youngest child is​ self-supporting. She is not concerned about her outstanding​ mortgage, as the children would live with her sister in the event of​ Joetta’s death. Assuming she can receive a 5 percent​ after-tax, after-inflation return on insurance​ proceeds, use the earnings multiple method to calculate her insurance need.  (HINT: Rather than simply multiply your salary times the earnings​ multiple, first adjust your salary downward to compensate for the fact that the​ family’s living expenses will drop slightly with your death. )

Antonio would like to replace his golf clubs with a​ custom-measured set. A local sporting goods megastore is advertising custom clubs for ​$520​, including a new bag.​ In-store financing is available at 5.77 ​percent, or he can choose not to renew his ​$300 certificate of deposit​ (CD), which just matured. The advertised CD renewal rate is 7.69 percent. Antonio knows the​ in-store financing costs would not affect his​ taxes, but he knows​ he’ll pay taxes ​(25 percent federal and 5.75 percent​ state) on the CD interest earnings.  The​ after-tax CD earnings rate is:

Jerry​ Carter’s home is currently​ valued, on a replacement cost​ basis, at ​$297,000. When he last checked his​ policy, his home was insured for ​$207,757 and he did not have an inflation guard endorsement. If he has a ​$24,550 claim due to a kitchen​ fire, how much will his​ homeowner’s insurance policy​ pay? 

Determine the total​ first-year cost of car ownership for Milagros. She just purchased a vehicle valued for ​$15,990 with the following​ costs:  The​ first-year cost of ownership for a vehicle valued and purchased for ​$15,990 is​:

In addition to considering specific information about the interest​ rate, method of balance​ calculation, grace​ period, annual​ fee, and other associated fees and​ benefits, Maria should consider the following characteristics unique to the Discover​ card: