Compound Interest Describes Increases in Value When Interest Is Paid

question 52

Multiple Choice

Compound interest describes increases in value when interest is paid, or compounded, on

• A) only the original amount invested.
• B) only the previously accumulated interest payments.
• C) the original amount invested and previously accumulated interest payments.
• D) the original amount invested minus any previously accumulated interest payments.

---

Definitions:

Accounts Receivable

Amounts owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process.

Manufacturing Overhead Budget

A detailed plan that outlines the expected indirect factory-related costs for a production period.

Direct Labor-Hours

The total hours of labor directly involved in manufacturing a product, used in job costing and determining labor costs.