Which of the Following Is NOT a True Statement

question 273

Multiple Choice

Which of the following is NOT a true statement?

• A) Present values and discount rates move in the opposite directions from one another.
• B) On monthly compounded loans, the EAR will exceed the APR.
• C) Compounding essentially means earning interest on interest.
• D) Future values increase with increases in interest rates.
• E) All else the same, the longer the term of a loan the lower will be the total interest you pay on it.

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Definitions:

Physical Inventory Count

A physical inventory count is the manual process of counting all the goods a company physically has on hand at a specific time to verify stock records and values.

First-In, First-Out

An inventory valuation method where the goods first produced or acquired are sold or used first, presuming that the oldest inventory items are consumed before newer ones.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after purchases and sales have been accounted for.

Average Cost Formulas

A method used in accounting to calculate the cost of goods sold and ending inventory by averaging the cost of all items available for sale during the period.