A(n) ____ Is a Financial Instrument That Agrees to Pay

question 35

Multiple Choice

A(n) ____ is a financial instrument that agrees to pay an equal amount of money per period into the indefinite future (i.e., forever) .

• A) annuity
• B) annuity due
• C) sinking fund
• D) perpetuity

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Definitions:

Accrued Product Warranty

A liability representing the estimated costs of fulfilling product warranty obligations.

Pre-tax Book Income

The income of a company before taxes are deducted, as reported in its financial statements.

Deferred Tax

Deferred tax refers to taxes that are accrued but not yet paid due to timing differences between the recognition of income or expenses for financial reporting and tax purposes.

Financial Reporting

The process by which a company discloses its financial performance to stakeholders, including investors and regulators, typically through financial statements.