Which of the Following Transactions Increases the Quality of Income

question 20

Multiple Choice

Which of the following transactions increases the quality of income ratio?

• A)The accrual of revenue.
• B)The accrual of an expense.
• C)The cash payment of an account payable.
• D)The payment of a cash dividend.

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Definitions:

Buy Down

A financing technique where points are paid upfront by a borrower to reduce the interest rate on a loan.

Point Purchased

In finance, particularly in mortgage contexts, this refers to prepaid interest that the borrower opts to pay upfront in order to lower the interest rate on the loan.

Monthly Mortgage

A regularly scheduled payment that often includes both interest and principal, made by a borrower to a lender for the repayment of a home loan.

Interest Rate

The percentage rate that is paid by a bank on money that is in some accounts.