As of November 14, Ben has an outstanding credit card balance of $1,100 from purchases made over the past month. The new billing period begins on November 15
Assume Ben's outstanding balance for the first 15 days of this new billing period (Nov. 15-29) is $1,100. Then on November 29, the financial institution receives a payment of $600 from Ben, reducing his balance to $500. This is the balance for the remaining 15 days.
Using the adjusted balance method and a monthly interest rate of 2.5%, Ben's finance charge would be
A) $15.00.
B) $12.50.
C) $27.50.
D) $20.00.
Answer: B
Explanation: B) $500 × .025 = $12.50
You might also like to view...
Prepare general journal entries for the following transactions of Norman Company, assuming they use the allowance method to account for uncollectible accounts. Apr 01Sold $3,500 of merchandise to Lance Co., receiving an 8%, 90-day, $3,500 note. 15Wrote off $1,500 owed by Guy Co. from a previous period sale. 30Received a $5,000, 6%, 30-day note receivable from James Co. as settlement for its $5,000 account receivable.May 30The note received from James on April 30 was collected in full.Jun 30Lance Co. was unable to pay the note on the due date.Jul 15Guy Co. paid $1,000 of the amount written off on April 15.
What will be an ideal response?
Factoring receivables is beneficial to a seller for all of the following reasons except:
A. May pass the risk of bad debts to the factor. B. There are no fees for factoring. C. Seller avoids the cost of billing and accounting for receivables. D. Allows firms to receive cash earlier. E. Passes ownership of the receivables to the factor.
According to the case on Meg Whitman, former CEO of eBay, eBay
a. added transparency to the buying and selling process b. profited by reducing transparency and thus taking advantage of sellers’ greater ignorance c. profited by reducing transparency and thus taking advantage of buyers’ greater ignorance d. transparency has no effect on business profits or on how customers use eBay, but she believes in being transparent for ethical reasons anyway
A hostile takeover involves an attempt by one group of stockholders to solicit votes from other stockholders in order to put a new management team into place and is usually motivated by low stock price.?
Answer the following statement true (T) or false (F)