Answer: d. A company paid for an insurance premium of $6,000 on January 1. The insurance is for a year. Failing to make adjustments for the month of January would overstate assets and stockholder's equity by $6,000.
Explanation:
If a company were to pay $6,000 for Insurance for the YEAR in January, this would be recorded as a PREPAID EXPENSE.
This Prepaid Expense will then be apportioned per month over the year to each month as expenses of $500.
Failing to make adjustments for the month of January would not overstate assets and stockholder's equity by $6,000 but by $500.
Fiona signed an agreement to either buy or not buy nick’s vacant lot for $310,000 by a specific date. This agreement is called a bilateral contract.
<h3>What is bilateral contact?</h3>
A bilateral contract is a contract which is made between two parties. Under this contract, both parties make promises to each other on the terms and conditions. In this contract, the promise of one party turns into a consideration of the other party. It is the most common kind of contract which is binding in nature.
Fiona signed a contract promising to either purchase Nick's vacant lot for $310,000 by a certain date or not. It's referred to as a bilateral contract.
Learn more about the bilateral contracts from here:
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NASTY AND ALSO THE GUY THE ANSWERED IS NOW BANNED HAHAHA
Answer:
Commercial banks, required reserve, loans, deposits, create.
Explanation:
The main function of commercial banks is to accept deposits and then to lend the same money (minus required reserves) back out. Banks make a profit by charging a higher interest rate on loans than the interest rate they pay on deposits. Through the loan process, banks are actually able to create money.
The major function of commercial banks is
1. Accepting deposits from people and business organzations.
2. Giving loans to Customers to be paid at a specific period of time at an agreed interest rate.
Required reserve is the minimum amount of money which in required for a commercial Bank to hold/save out of every deposit. If the required reserve is 10% of every deposit, a customer customer deposited $100. The required will be $10 which the bank will hold. The remaining $90 is the balance which banks can loan out to Customers.
Commercial Banks make profit by charging a higher interest rate on loan and lower interest rate on deposits. For example: 7.5% interest rate on loan and 2.5% interest rate on deposits. The 5% difference is the bank Profit.
