In the Normal Formula for Interest Calculation,the Interest Rate Is

question 108

Multiple Choice

In the normal formula for interest calculation,the interest rate is on a(n) _____ basis and therefore the time variable must reflect how many _____ out of _____ in the interest period.

• A)biannual; months; 6
• B)annual; years; 1
• C)biannual; half-years; 2
• D)annual; months; 12

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Definitions:

Debit

An entry recorded on the left side of an account ledger, representing an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Credit

An accounting entry that increases a liability or equity account or decreases an asset or expense account.

Balance Sheet Accounts

Accounts that reflect the assets, liabilities, and shareholders' equity of a company at a particular point in time.

Real Accounts

Accounts related to assets, liabilities, and equity that are not closed at the end of the accounting period, as opposed to nominal accounts.