The Primary Emphasis in Most Tests of Details of Balances

question 68

Multiple Choice

The primary emphasis in most tests of details of balances is on the

• A) balance sheet accounts.
• B) revenue accounts.
• C) cash flow statement accounts.
• D) expense accounts.

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Definitions:

Zero-coupon Bond

A bond that does not pay periodic interest and is sold at a discount to its face value, with the full face value repaid at maturity.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Forward Interest Rate

Rate of interest for a future period that would equate the total return of a long-term bond with that of a strategy of rolling over shorter-term bonds.

Yield Curve

A graph that plots the interest rates at a set point in time of bonds having equal credit quality but differing maturity dates, typically used to predict economic changes.