Which ONE of the Following Statements Is True About Amortization

question 28

Multiple Choice

Which ONE of the following statements is true about amortization?

• A) Amortization refers to the way the borrowed amount (principal) is paid down over the life of the loan.
• B) With an amortized loan, each loan payment contains some payment of principal and an interest payment.
• C) A loan amortization schedule is just a table that shows the loan balance at the beginning and end of each period, the payment made during that period, and how much of that payment represents interest and how much represents repayment of principal.
• D) All of the above are true.

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Definitions:

Performance Report

A document that compares actual operational or financial results to planned or budgeted results.

Cost Center

A department or unit within an organization that does not directly add to profit but still incurs costs.

Departmental Contribution To Overhead

The amount of money that each department contributes towards covering the company's indirect costs or overheads.

Profit Center

A segment or division within a company that is responsible for generating its own revenue and profit, tracked separately for performance analysis.