If Your Investment Pays the Same Amount at the End

question 70

Multiple Choice

If your investment pays the same amount at the end of each year forever, the cash flow stream is called

• A) a perpetuity.
• B) an ordinary annuity.
• C) an annuity due.
• D) none of the above.

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Definitions:

Adjusted Trial Balance

A list of all accounts and their balances after adjustments, used to verify the equality of debits and credits and prepare financial statements.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, preparing the company's books for the next period.

Net Sales

The sum a company receives from its sales, after accounting for returns, compensations for damaged or missing items, and discount deductions.

Gross Profit

The difference between the revenue from sales and the cost of goods sold, before deducting overheads, interest, and taxes.