Listed Below Are Five Terms Followed by a List of Phrases

question 115

Multiple Choice

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Cost-effectiveness

• A)The decision to include an amount in the financial statements.
• B)Accounting information should be unbiased.
• C)Considers the value of using information relative to cost of providing it.
• D)Important in analysis between firms.
• E)Applying the same accounting practices over time.

---

Definitions:

Treasury-bill Rate

The interest rate determined by the market for U.S. Treasury bills, which are short-term government securities.

Continuous Compounding

The process whereby interest earned is immediately reinvested to earn more interest, theoretically occurring an infinite number of times per period.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, accounting for compounding.

EAR

Effective Annual Rate, the actual return on an investment when compounding interest is taken into account over a one-year period.