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 interest does not change over the life of a loan?

Floating interest

Fixed interest

Variable interest

Compound interest

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Verified step by step guidance

Understand the concept of fixed interest: Fixed interest refers to an interest rate that remains constant throughout the life of a loan, meaning it does not fluctuate with market conditions or other factors.

Compare fixed interest with floating interest: Floating interest rates change over time based on market conditions, such as changes in the prime rate or other benchmarks.

Compare fixed interest with variable interest: Variable interest rates also fluctuate, often tied to specific indices or market conditions, making them different from fixed interest.

Compare fixed interest with compound interest: Compound interest refers to the process of interest being calculated on both the principal and previously accrued interest, and it is not a type of interest rate that remains constant.

Conclude that fixed interest is the type of interest that does not change over the life of a loan, as it remains stable and predictable for borrowers.