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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following statements about annuities is true?

An annuity is a series of equal payments made at regular intervals over a specified period of time.

Annuities can only be paid at the end of each period, never at the beginning.

The present value of an annuity is always greater than its future value.

An annuity always involves payments that increase each period.

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Verified step by step guidance

Understand the definition of an annuity: An annuity is a financial arrangement where a series of equal payments are made at regular intervals over a specified period of time. This is a foundational concept in financial accounting.

Clarify the timing of payments: Annuities can be classified into two types based on the timing of payments—ordinary annuities (payments made at the end of each period) and annuities due (payments made at the beginning of each period). Therefore, the statement that annuities can only be paid at the end of each period is incorrect.

Compare present value and future value: The present value of an annuity depends on the discount rate and the timing of payments. It is not always greater than the future value; the relationship between present value and future value depends on the interest rate and the number of periods.

Evaluate the nature of payments: An annuity involves equal payments over time, not payments that increase each period. If payments increase, it is not considered a standard annuity but rather a growing annuity or another type of financial arrangement.

Identify the correct statement: Based on the analysis, the correct statement is that an annuity is a series of equal payments made at regular intervals over a specified period of time.