The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date.
Correct answer: A. Amortization
- A. Amortization
- B. Loan Payment
- C. Liability
- D. Securitization
Explanation
Amortization is the systematic repayment of a loan through regular installments containing both interest and principal. By maturity, these installments reduce the outstanding loan to zero.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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