Which One of the Following Statements Concerning Interest Rates Is

question 20

Multiple Choice

Which one of the following statements concerning interest rates is correct?

• A)The stated rate is the same as the annual percentage rate.
• B)An annual percentage rate is the rate that applies if interest were charged annually.
• C)The annual percentage rate increases as the number of compounding periods per year
• Increases.
• D)Banks prefer more frequent compounding on their savings accounts.
• E)For any positive rate of interest, the annual percentage rate will always exceed the stated
• Interest rate.

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Definitions:

Aging

A method used in accounting to categorize accounts receivables based on the length of time an invoice has been outstanding to manage and track debts.

Uncollectible

Accounts receivable that are deemed to be uncollectable and thus are written off as an expense.

Receivables Accounting

The process of recording and managing the money owed to a business by its customers for goods or services offered.

IFRS

International Financial Reporting Standards, a set of accounting guidelines that govern how financial statements are prepared and presented globally.