Which of the Following Statements Is CORRECT

question 114

Multiple Choice

Which of the following statements is CORRECT?

• A) A time line is not meaningful unless all cash flows occur annually.
• B) Time lines are not useful for visualizing complex problems prior to doing actual calculations.
• C) Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly.
• D) Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periods.
• E) Some of the cash flows shown on a time line can be in the form of annuity payments,but none can be uneven amounts.

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Definitions:

Accounts Payable

A liability account that tracks money owed by a business to suppliers or creditors for goods and services purchased on credit.

Notes Payable

A financial liability on a company's balance sheet representing promissory notes that require future payments of principal and possibly interest.

Maturity Value

The amount due to the owner of a financial instrument at its maturity date, including principal and interest.

Default

Failure of maker to pay the maturity value of a note when due.