Two Main Accounting Principles Used in Accrual Accounting Are Matching

question 43

True/False

Two main accounting principles used in accrual accounting are matching and full closure.

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Definitions:

Compound Interest

A way of calculating interest whereby the charge is based on the initial principal amount as well as on the interest that has accumulated in prior periods of a loan or deposit.

Cash Inflow

Money received by a business, typically from operational, investing, and financing activities.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Compound Interest

This refers to the calculation of interest on both the initial amount deposited or borrowed as well as on the interest that has already been accumulated over previous periods.