Which Statement Applies to an Amortized Loan That Requires Fixed

question 97

Multiple Choice

Which statement applies to an amortized loan that requires fixed principal payments?

• A)The loan payments will be either an ordinary annuity or an annuity due.
• B)The final loan payment will equal the required principal payment amount.
• C)The interest is paid only at loan maturity.
• D)The loan payments are an annuity due.
• E)The loan payments will decrease over time.

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Definitions:

Goodwill

Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.

NCI

Non-Controlling Interest, which refers to the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Common Shares

Equity securities representing ownership in a company, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted for the investor’s share of the investee’s profit or loss.