Solution Manual for Financial And Managerial Accounting 5th Edition by Weygandt, Kimmel, Mitchel, Verified Chapters 1 - 25, Complete Newest Version
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Test Bank for Financial and Managerial
Accounting, 5th Edition by Jerry J. Weygandt,
Paul D. Kimmel A+
Financial and Managerial Accounting, 5e (Weygandt)
Appendix G Time Value of Money
Interest is the difference between the amount borrowed and the principal. Answer: FALSE
Diff: 1
LO: 1
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
Compound interest is computed on the principal and any interest earned that has not been paid or
received.
Answer: TRUE Diff: 1
LO: 1
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
The future value of a single amount is the value at a future date of a given amount invested now,
assuming compound interest.
Answer: TRUE Diff: 1
LO: 1
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
A+ Page 1
,Created by: A Solution
When the periodic payments are not equal in each period, the future value can be computed by
using a future value of an annuity table.
Answer: FALSE Diff: 1
LO: 1
Bloom / IFRS: C
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
The process of determining the present value is referred to as discounting the future amount.
Answer: TRUE
Diff: 1
LO: 2
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
In computing the present value of an annuity, it is not necessary to know the number of discount
periods.
Answer: FALSE Diff: 1
LO: 2
Bloom / IFRS: C
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
A+ Page 2
,Created by: A Solution
The present value of a long-term note or bond is a function of two variables. Answer: FALSE
Diff: 1
LO: 2
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
The present value of an annuity is the value now of a series of future receipts or payments,
discounted assuming compound interest.
Answer: TRUE Diff: 1
LO: 2
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Decision Analysis
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
With a financial calculator, one can solve for any interest rate or for any number of periods in a
time value of money problem.
Answer: TRUE Diff: 1
LO: 4
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Decision Analysis
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management Minutes: 1
Compound interest is the return on principal
only.
for one or more periods.
plus interest for two or more periods.
for one period.
Answer: C
Diff: 1
LO: 1
The factor 1.0609 is taken from the 3% column and 2 periods row in a certain table. From what
table is this factor taken?
Future value of 1
Future value of an annuity of 1
Present value of 1
Present value of an annuity of 1 Answer: A
Diff: 2
LO: 1
Bloom / IFRS: C
AACSB/ IMA: Analytic / Investment Decisions
AICPA: BB: Resource Management; FC: Measurement; PC: Problem Solving/Decision Making
Minutes: 1
If $40,000 is put in a savings account paying interest of 4% compounded annually, what amount
will be in the account at the end of five years?
A) $32,878
B) $48,000
C) $48,620
D) $48,666
Answer: D
Explanation: 1.21665 × $40,000 = $48,666 (FVIF n= 5, i = 4% × PV) = FV
Diff: 2
LO: 1
Bloom / IFRS: AP
AACSB/ IMA: Analytic / Quantitative Methods
AICPA: BB: Resource Management; FC: Measurement; PC: Problem Solving/Decision Making
Minutes: 2
A+ Page 4
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