When More Than One Payment Is Made on a Simple

question 97

True/False

When more than one payment is made on a simple interest loan,the method of computing interest is known as the declining balance method.

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Definitions:

Direct Write-Off Method

A method of accounting for bad debts that involves charging unpaid customer accounts directly to the income statement when they are determined to be uncollectible.

Accounting Equation

The fundamental equation that ensures the balance of a company's financial records: Assets = Liabilities + Equity.

Uncollectible Accounts

Accounts that are considered to be uncollectable due to the debtor being unlikely to pay, also known as bad debt.

Notes Receivable

This refers to promissory notes that are receivable by a business, representing amounts due from others that they have promised to pay within a specific period.