1. Determine whether each statement is true or false. If the statement is false, make the necessary change(s) to produce a true statement A. You spent 1% of your $50,000-per-year salary on gifts, so you spent $5000 on gifts for the year. B. Federal income tax is a percentage of your gross income. C. Collision coverage pays for damage to another car if you cause an accident. D. Over the life of an installment loan, the interest portion increases and the portion applied to pay off the principal decreases with each successive payment. E. After depositing $1500 in an account at a rate of 4%, my balance at the end of the first year was $(1500)(0.04).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. Determine whether each statement is true or false. If the statement
is false, make the necessary change(s) to produce a true statement
A. You spent 1% of your $50,000-per-year salary on gifts, so
you spent $5000 on gifts for the year.
B. Federal income tax is a percentage of your gross income.
C. Collision coverage pays for damage to another car if you
cause an accident.
D. Over the life of an installment loan, the interest portion
increases and the portion applied to pay off the principal
decreases with each successive payment.
E. After depositing $1500 in an account at a rate of 4%, my
balance at the end of the first year was $(1500)(0.04).
2. Under what circumstances should taxpayers itemize
deductions? Explain.
3. Write the difference between debit cards and credit cards.
4. Describe the difference between simple and compound interest.
5. Define the terms: mortgage and down payment?
6. In what circumstance we use formula A = Pert to calculate the
future value from compound interest?
Transcribed Image Text:1. Determine whether each statement is true or false. If the statement is false, make the necessary change(s) to produce a true statement A. You spent 1% of your $50,000-per-year salary on gifts, so you spent $5000 on gifts for the year. B. Federal income tax is a percentage of your gross income. C. Collision coverage pays for damage to another car if you cause an accident. D. Over the life of an installment loan, the interest portion increases and the portion applied to pay off the principal decreases with each successive payment. E. After depositing $1500 in an account at a rate of 4%, my balance at the end of the first year was $(1500)(0.04). 2. Under what circumstances should taxpayers itemize deductions? Explain. 3. Write the difference between debit cards and credit cards. 4. Describe the difference between simple and compound interest. 5. Define the terms: mortgage and down payment? 6. In what circumstance we use formula A = Pert to calculate the future value from compound interest?
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