Which of the Following Statements Is True

question 69

Multiple Choice

Which of the following statements is true?

• A) With fixed principal payments on a long-term note payable, the principal portion increases each period.
• B) With fixed principal payments on a long-term note payable, the interest portion decreases each period.
• C) With fixed principal payments on a long-term note payable, the interest portion does not change each period.
• D) With fixed principal payments on a long-term note payable, the interest portion increases each period.

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Definitions:

Journal Entry

The accounting method for expressing the effects of a transaction on accounts in a debits-equal-credits format.

Noncumulative

Noncumulative refers to dividends on preferred stock that, if not declared or paid in a given period, do not accumulate and are not owed to shareholders in future periods.

Common Stockholders

Individuals or entities that own shares of common stock in a corporation, granting them rights to dividends and votes on company matters.