Decreases in Equity That Represent Costs of Providing Products or Services

question 130

Multiple Choice

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

• A)Liabilities.
• B)Equity.
• C)Withdrawals.
• D)Expenses.
• E)Owner's Investment.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Perpetuity

A type of financial instrument that pays a fixed amount of cash flows indefinitely, without a maturity date.

Compounded Monthly

A method of calculating interest in which the interest earned each month is added to the principal, and future interest is calculated on the new total.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money, or the rate earned on an investment.