The Time Value Concept/calculation Used in Amortizing a Loan Is

question 136

Multiple Choice

The time value concept/calculation used in amortizing a loan is

• A) future value of a dollar
• B) future value of an annuity
• C) present value of a dollar
• D) present value of an annuity

---

Definitions:

Lower of Cost

A principle that states inventory should be recorded at the lesser of its historical cost or the current market value, to ensure assets are not overstated.

IFRS

International Financial Reporting Standards, which are international accounting standards set by the International Accounting Standards Board to ensure transparency and comparability of financial statements worldwide.

Direct Costing

An accounting method that only considers variable costs as product costs, while fixed costs are treated as period expenses.

Inventory Errors

Mistakes in accounting for inventory that can lead to inaccuracies in financial reporting, affecting cost of goods sold and net income.