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

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which type of loan charges the same interest rate and requires equal payments throughout the life of the loan?

Variable-rate loan

Balloon loan

Fixed-rate loan

Revolving credit

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Verified step by step guidance

Understand the concept of a fixed-rate loan: A fixed-rate loan is a type of loan where the interest rate remains constant throughout the life of the loan, ensuring that the borrower makes equal payments over time.

Compare the fixed-rate loan to other types of loans: Variable-rate loans have interest rates that fluctuate based on market conditions, balloon loans require smaller payments initially with a large payment at the end, and revolving credit allows borrowing up to a limit with flexible repayment terms.

Identify the key feature of a fixed-rate loan: The consistent interest rate ensures predictable and equal payments, making it distinct from other loan types.

Recognize the advantages of fixed-rate loans: They provide stability and are ideal for borrowers who prefer predictable monthly payments without worrying about interest rate changes.

Conclude that the correct answer is 'Fixed-rate loan' based on its characteristics of equal payments and a constant interest rate throughout the loan term.