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Question
Which of the following terms is used to describe the process of writing down the long-term investments in intangible assets?
Which of the following terms is used to describe the process of writing down the long-term investments in intangible assets?
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Solution
The correct option is C Amortisation
Amortization can refer to the process of paying off debt over time in regular instalments of interest and principal sufficient to repay the loan in full by its maturity date. With mortgage and auto loan payments, a higher percentage of the flat monthly payment goes toward interest early in the loan. With each subsequent payment, a greater percentage of the payment goes toward the loan's principal.
Amortization can refer to the process of paying off debt over time in regular instalments of interest and principal sufficient to repay the loan in full by its maturity date. With mortgage and auto loan payments, a higher percentage of the flat monthly payment goes toward interest early in the loan. With each subsequent payment, a greater percentage of the payment goes toward the loan's principal.
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