Only One Copy of the Prelist Should Be Prepared When

question 30

True/False

Only one copy of the prelist should be prepared when an employee opens mail with customer payments to avoid complexity in the accounting system and maintain control.

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Definitions:

Interest Payable

A liability account showing the amount of interest expense that has been incurred but not yet paid as of the balance sheet date.

Effective Interest Method

A technique used in accounting to allocate interest expense or income over the life of a financial instrument at a constant interest rate.

Semiannually

Occurring twice a year, typically every six months.

Discount Amortized

The process of gradually reducing the discount on bonds payable over the life of the bonds as an interest expense.