A Theoretical Difference Between the Effective Interest Method and the Straight-Line

question 48

Multiple Choice

A theoretical difference between the effective interest method and the straight-line amortization method is that

• A)the effective interest method is easier to use
• B)the effective interest method can be used if there is a material difference in the computation when compared to the straight-line method
• C)the effective interest method produces a result that is based on a constant rate of interest
• D)the effective interest method produces a result that is based on a constant interest expense

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Definitions:

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, influenced by culture, attitudes, emotions, and values.

Internal Causes

Reasons or factors that originate within an individual or system, leading to certain outcomes or behaviors.

External Causes

Factors or conditions outside of an individual's control that impact events or outcomes, often used in analyzing behaviors or situations.

Self-Serving Bias

The tendency to attribute one’s successes to internal causes and one’s failures to external causes.