The Price Index Was 220 in One Year and 260

question 76

Multiple Choice

The price index was 220 in one year and 260 in the next year. What was the inflation rate?

• A)9.0 percent
• B)114.6 percent
• C)18.2 percent
• D)40.0 percent

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Definitions:

Discount Amortization

The process of gradually writing off the discount on bonds payable over the life of the bonds.

Bond Interest

The periodic payment made by bond issuers to bondholders, usually expressed as a percentage of the face value of the bond.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Face Value

The nominal value or dollar value printed on a bond, stock, or other financial instrument, indicating its worth at maturity.