Match the Following Terms with the Appropriate Definition

question 66

Multiple Choice

Match the following terms with the appropriate definition.
-liabilities created by adjusting entries

• A)accrued liabilities
• B)contingent liabilities
• C)current liabilities
• D)interest rate
• E)liabilities
• F)payroll taxes
• G)sales taxes
• H)warranty
• I)withholdings

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Definitions:

Payback Period

The duration of time it takes for an investment to generate enough revenue to recover the initial cost of the investment.

Profitability Index

A measure used in capital budgeting to evaluate the profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.