Question

Which is the best definition of an annuity?

	a.	A level stream of cash flows for a fixed period of time.
	b.	The interest rate expressed as if it were compounded once per year.
	c.	An annuity for which the cash flows occur at the beginning of the period.
	d.	The interest rate expressed in terms of the interest payment made each period. Also, quoted interest rate
	e.	The interest rate charged per period multiplied by the number of periods per year Which one of the following is found in the operating activity section of a statement of cash flows? a. Dividends paid. b. Decrease in long-term debt. c. Increase in accounts payable. d. Fixed asset acquisition. e. Decrease in common stock.

Answer 1

1)Annuity is a level stream of cash flows for a fixed period of time

The interest rate expressed as if it were compounded once per year is the defenition of effective annual rate

An annuity for which the cash flows occur at the beginning of the period is the defenition of annuity due

The interest rate expressed in terms of the interest payment made each period. Also, quoted interest rate  is the defenition of stated interest rate or quoted interest rate

The interest rate charged per period multiplied by the number of periods per year is the defenition of annual percentage rate

So the correct answer is Option A) A level stream of cash flows for a fixed period of time.

2) In cash flow operating activities include change in current assets and current liabilities

Among the options Increase in accounts payable will be found in operating activity

Dividends paid is Financing activity

Decrease in long-term debt. is Financing activity

Fixed asset acquisition is investing activity

Decrease in common stock is Financing activity

So the correct answer is Option C) Increase in accounts payable