The Interest Rate of a Bond Is Equal to the

question 71

Multiple Choice

The interest rate of a bond is equal to the

• A) difference between the face value and the initial price all divided by the face value.
• B) difference between the face value and the initial price.
• C) difference between the face value and the initial price all divided by the initial price.
• D) sum of the face value and the initial price all divided by the face value.
• E) sum of the face value and the initial price all divided by the initial price.

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Definitions:

Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear on the financial statements after year-end adjusting journal entries have been made.

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, finalizing the books for the period.

Periodic Inventory System

An inventory accounting system where goods are physically counted at specific intervals to determine the cost of goods sold and ending inventory levels.

Gross Method

An accounting approach to recording purchases and sales transactions without deducting cash discounts at the point of sale.