The Continuity Assumption States That a Business Will Continue to Operate

question 100

True/False

The continuity assumption states that a business will continue to operate into the foreseeable future.

---

Definitions:

Effective Interest Method

A method of calculating the interest rate on a bond that factors in the actual amount paid over the life of the bond, including any fees or costs.

Amortization Table

A table that outlines each periodic payment on a loan over time, breaking down the amounts that go towards the principal and interest.

Semiannual Payment

A payment made twice a year, often related to loans, insurance premiums, or investments.

Collateral Bonds

Bonds that are secured by a specific asset or form of collateral, offering more security to bondholders.