Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

A company repays a loan by making equal payments each month, with each payment covering both interest and principal. Which type of repayment schedule is described in this scenario?

Balloon repayment schedule

Interest-only repayment schedule

Bullet repayment schedule

Amortized repayment schedule

Previous problemNext problem

Verified step by step guidance

Understand the concept of an amortized repayment schedule: In this type of schedule, the borrower makes equal periodic payments (e.g., monthly) that include both interest and principal. Over time, the portion of the payment allocated to interest decreases, while the portion allocated to principal increases.

Compare the given repayment schedule to other types: A balloon repayment schedule involves smaller periodic payments with a large lump sum (balloon payment) at the end. An interest-only repayment schedule involves payments covering only interest during the loan term, with the principal repaid at the end. A bullet repayment schedule involves no periodic payments, with the entire principal and interest paid at the end of the term.

Identify the key characteristics of the described repayment schedule: The problem states that the company makes equal monthly payments, and each payment covers both interest and principal. This matches the definition of an amortized repayment schedule.

Eliminate the other options: Since the payments are equal and include both interest and principal, the repayment schedule cannot be a balloon, interest-only, or bullet repayment schedule.

Conclude that the correct answer is an amortized repayment schedule, as it aligns with the described characteristics of equal payments covering both interest and principal.