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ch06 - CHAPTER 6 ACCOUNTING AND THE TIME VALUE OF MONEY...

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CHAPTER 6 ACCOUNTING AND THE TIME VALUE OF MONEY TRUE-FALSE —Conceptual Answer No. Description F 1. Time value of money. T 2. Definition of interest expense. F 3. Simple interest. T 4. Compound interest. T 5. Compound interest. F 6. Future value of an ordinary annuity. F 7. Present value of an annuity due. T 8. Compounding period interest rate. T 9. Definition of present value. T 10. Future value of a single sum. F 11. Determining present value. F 12. Present value of a single sum. F 13. Annuity due and interest. T 14. Annuity due and ordinary annuity. T 15. Annuity due and ordinary annuity. T 16. Number of compounding periods. F 17. Future value of an annuity due factor. T 18. Present value of an ordinary annuity. F 19. Future value of a deferred annuity. T 20. Determining present value of bonds. MULTIPLE CHOICE —Conceptual Answer No. Description a 21. Appropriate use of an annuity due table. b 22. Understanding compound interest tables. a 23. Identification of correct compound interest table. d 24. Identification of correct compound interest table. c 25. Identification of correct compound interest table. c 26. Identification of correct compound interest table. b 27. Identification of correct compound interest table. c 28. Identification of present value of 1 table. c S 29. Identification of correct compound interest table. a S 30. Identification of correct compound interest table. a S 31. Present value of an annuity due table. c P 32. Definition of an annuity due. a P 33. Identification of compound interest concept. d P 34. Identification of compound interest concept. d 35. Identification of number of compounding periods. a 36. Adjust the interest rate for time periods.
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Test Bank for Intermediate Accounting, Twelfth Edition MULTIPLE CHOICE —Conceptual (cont.) Answer No. Description d 37. Definition of present value. c P 38. Compound interest concepts. c P 39. Future value of an annuity due factor. c 40. Determine the timing of rents of an annuity due. b 41. Factors of an ordinary annuity and an annuity due. c 42. Determine present value of an ordinary annuity. b 43. Identification of a future value of an ordinary annuity of 1. b 44. Present value of an ordinary annuity and an annuity due. b 45. Difference between an ordinary annuity and an annuity due. d 46. Definition of deferred annuities. P These questions also appear in the Problem-Solving Survival Guide. S These questions also appear in the Study Guide. MULTIPLE CHOICE —Computational Answer No. Description d 47. Interest compounded quarterly. c 48. Calculate present value of a future amount. b 49. Calculate a future value. a 50. Calculate a future value of an annuity due. b 51. Calculate a future value. c 52. Calculate a future value. c 53. Calculate present value of a future amount. d 54. Calculate present value of a future amount. a 55. Calculate present value of an annuity due.
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