Proprietary Funds Use The

question 144

Multiple Choice

Proprietary funds use the:

• A) current financial resources measurement focus and modified accrual basis of accounting
• B) economic resources measurement focus and accrual basis of accounting.
• C) economic resources measurement focus and modified accrual basis of accounting.
• D) current financial resources measurement focus and accrual basis of accounting.

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Definitions:

Interest-Only Loan

A type of loan where the borrower is required to pay only the interest on the principal balance for a set period, with the principal balance unchanged.

Principle Amount

The principal amount is the initial size of a loan or an investment, not including profits or interest.

Loan Payment

A payment made by a borrower to a lender that may include both the principal and interest.

Effective Annual Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate, including any compounding that occurs during the year.