The Payment of an Account Payable

question 54

Multiple Choice

The payment of an account payable

• A)decreases total assets.
• B)increases total assets.
• C)has no effect on total assets.
• D)increases total liabilities.

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Definitions:

Strip Bonds

Bonds that have had their principal and coupon payments separated, or "stripped", creating two distinct types of securities: zero-coupon bonds and interest payment coupons.

Compounded Monthly

Refers to the process of adding interest to the principal balance of a loan or investment on a monthly basis, allowing the interest to then earn interest in the subsequent months.

Quadruple

To multiply or increase fourfold; also refers to a quantity that is four times as large as another.

Effective Annual Rate

The interest rate that is adjusted for compounding over a yearly period.