Compounding Is the Process Of

question 87

Multiple Choice

Compounding is the process of:

• A)additional interest being paid on interest that has already been earned.
• B)adding the percentage of interest times your initial principal yearly.
• C)deposits steadily increasing a set amount annually.
• D)None of these are true.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.

Net Income

The amount of profit that remains after all operating expenses, interest, taxes, and dividends have been subtracted from total revenues.

End-of-period Spreadsheet

A document or report summarizing the financial status of a company at the end of a fiscal period, including assets, liabilities, and equity.

Statement of Stockholders' Equity

A financial document that represents the changes in the equity interests of a company’s shareholders over a reporting period, including the issuance or purchase of shares, dividends paid, and earnings or losses.