Explain the following :
Amortization
Payee
Maturity Date
Compensating error?
Answers
Answer:
Amortization can refer to the process of paying off debt over time in regular installments 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.
A payee is a party in an exchange who receives payment. ... The payer receives goods or services in return. The name of the payee is included in the bill of exchange and it usually refers to a natural person or an entity such as a business, trust, or custodian.
The maturity date is the date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due. ... The maturity date also refers to the termination date (due date) on which an installment loan must be paid back in full
A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero. A statistical analysis of an account may not find a compensating error.