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:

Accounting Changes

Alterations or updates made to accounting methods, estimates, or reporting entity, which can impact the financial statements of a business.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, including the balance sheet and income statement.

Future Value

The estimated value of an investment at a future point in time, based on its current value and expected growth rates over time, often used in financial planning and analysis.

Present Value

The current worth of a future sum of money or stream of cash flows given a specific rate of return.