If Creditors Add Finance Charges After Subtracting Payments Made During

question 8

Multiple Choice

If creditors add finance charges after subtracting payments made during the billing period, this is called the

• A)adjusted balance method.
• B)discount method.
• C)previous balance method.
• D)APR method
• E)average daily balance method.

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Definitions:

Wrong Account

An error where financial transactions are recorded in an incorrect account, potentially affecting the accuracy of financial statements.

Chart of Accounts

An organized list of all accounts in a business's financial system, which helps in recording transactions in the correct accounts.

Special Ledger

A set of subsidiary accounts or a separate bookkeeping system that provides detailed information in addition to the general ledger.

Accounting Systems

Systems designed to record, process, and report financial transactions systematically and accurately for a business entity.