What Is an Annuity Due

question 10

Multiple Choice

What is an annuity due?

• A)An annuity where the payments are made at the end of each period.
• B)An annuity where the payments are made at the beginning of each period.
• C)An annuity where if a payment is missed,it must be paid within one period or the investment is seized.
• D)An annuity where if a payment is missed,it must be paid immediately or the investment is seized.
• E)None of the above.

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Definitions:

Cash

A form of currency that companies and individuals use for transactions or to settle debts.

Journal Entry

is a record in accounting that notes the details of a financial transaction, including the accounts affected, debits, and credits.

Prepaid Insurance

A current asset account that represents payments made for insurance services that will be consumed in future periods.

Posting Reference

An alphanumeric code or number used in accounting to indicate the ledger account that a journal entry has been posted to.