A Stream of Equal Payments That Occurs at the Beginning

question 16

Multiple Choice

A stream of equal payments that occurs at the beginning of a period is called

• A)an ordinary annuity.
• B)compounding.
• C)an annuity due.
• D)an end annuity.

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Definitions:

Accounting Cycle

The process of recording, classifying, summarizing, and interpreting financial transactions over a fiscal period, culminating in the preparation of financial statements.

Purchasing Cycle

A series of steps that a company goes through to acquire goods or services, from the identification of a need to the approval of the invoice for payment.

Operating Cycle

The period of time it takes for a business to acquire inventory, sell it, and convert the sale into cash.