Which of the following statements is true?
A)With instalment payments on a non-current note payable, the principal portion decreases each period.
B)With instalment payments on a non-current note payable, the interest portion decreases each period.
C)With instalment payments on a non-current note payable, the interest portion does not change each period.
D)With instalment payments on a non-current note payable, the interest portion increases each period.

Question

Quizplus · Accepted Answer

With installment payments on a non-current note payable, the interest portion decreases each period because as the principal balance decreases with each payment, the amount of interest calculated on the decreasing principal also decreases.

Which of the Following Statements Is True