One of the Accounting Concepts Upon Which Deferrals and Accruals

question 108

Multiple Choice

One of the accounting concepts upon which deferrals and accruals are based is

• A) matching
• B) cost
• C) price-level adjustment
• D) conservatism

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Definitions:

Compounded Annually

Interest on an investment that is calculated once a year on both the initial principal and the accumulated interest from previous periods.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, so that the balance grows at an increasing rate.

Compounded Annually

A method of calculating interest in which the accumulated interest is added to the principal at the end of each year, resulting in interest on interest in successive years.

Compounded Annually

Interest on a loan or mortgage calculated on an annual basis, where interest from previous periods also earns interest in subsequent periods.