FASB's Statement of Financial Accounting Concepts No

question 140

True/False

FASB's Statement of Financial Accounting Concepts No. 7 specifies when fair value should be based on present value.

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Definitions:

Simple Interest

A method of calculating interest where the interest charge is based only on the original principal, not on the interest which has been added over time.

Annual Rate

The interest rate for a period of one year.

T-Bill

A short-term government debt obligation backed by the Treasury Department of a country with a maturity of less than one year.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual rate.