When an Auto Loan's Terms Are 8% Per Year Interest,seven

question 5

Multiple Choice

When an auto loan's terms are 8% per year interest,seven years in length,and a purchase price of $20,000,what value should be entered in the PV field?

• A) 7
• B) 7*12
• C) .08/12
• D) 20,000

---

Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse certain adjusting entries made in the previous period.

T-Accounts

A graphic representation of a general ledger account that outlines the debit and credit sides to visualize the effect of transactions on the account.

Reversing Entries

Entries executed at the onset of an accounting cycle to annul or reverse the adjusting records that were established at the end of the last period.

Journal Entries

Recordings in accounting journals of the financial transactions made by a business, showing debits and credits for each transaction.