A Business Makes a Cash Payment of $12,000 to a Creditor.Which

question 156

Multiple Choice

A business makes a cash payment of $12,000 to a creditor.Which of the following accounts is credited?

• A) Cash
• B) Accounts Payable
• C) Bank
• D) Accounts Receivable

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to assess the company's worth on its balance sheet.

Risk Premiums

The additional return over the risk-free rate that investors require to compensate for the extra risk of an investment.

Expected Returns

The anticipated profitability or yield an investment is projected to generate under normal circumstances.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk, which cannot be eliminated through diversification.