Compensation for Those Financial Debt Instruments That Cannot Be Easily

question 122

Multiple Choice

Compensation for those financial debt instruments that cannot be easily converted to cash at prices close to estimated fair market values is termed:

• A)liquidity premium
• B)market risk premium
• C)maturity premium
• D)none of the above

---

Definitions:

Subsidiary Ledgers

Detailed records that contain information about specific accounts, which together support and reconcile with summary amounts in the general ledger.

Daily Postings

The routine process of recording transactions in the books of accounts or ledgers on a daily basis to ensure financial records are up-to-date.

Control Account

An account in the general ledger used to simplify the recording of transactions and track the total amounts for financial statement purposes, often summarizing the details that are held in a subsidiary ledger.

Special Journals

Accounting books or ledgers used for recording and categorizing specific types of transactions such as sales, purchases, cash disbursements, and cash receipts in a more efficient manner.