A Business Uses a Credit to Record

question 16

Multiple Choice

A business uses a credit to record:

• A) A decrease in an asset account.
• B) A decrease in a capital account.
• C) A decrease in a revenue account.
• D) A decrease in an unearned revenue account.
• E) An increase in an expense account.

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Definitions:

Coupon

The interest payment made to bondholders, typically expressed as an annual percentage of the bond's face value.

Coupon Bond

A type of bond that offers periodic interest payments to the holder through fixed "coupons" and the return of the principal at maturity.

Yield To Maturity

The total return expected on a bond if held until its maturity date, including both interest payments and capital gains.

Interest Annually

The amount of interest earned or paid over a one-year period.