A Compound Annuity Uses the Principles of

question 114

Multiple Choice

A compound annuity uses the principles of

• A)reinvesting and present value.
• B)compound interest and future value.
• C)reinvesting and compound interest.
• D)compound interest and present value.
• E)amortization and reinvesting.

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Definitions:

Adjusting Entries

At the conclusion of an accounting cycle, entries recorded to distribute earnings and costs to the appropriate period they occurred.

Internal Transactions

Transactions that occur within a company, affecting its financial or operational position without involving an exchange with external entities.

Account Balances

The total amount of money in an account, calculated by adding all credits and subtracting all debits.

Adjusting Journal Entry

Entries made in accounting records at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.