An accomplishment consists of a alternation of according payments over a defined aeon of time (Smith, Skousen, Stice, & Stice, 1998). An accomplishment is a arrangement of according alternate payments fabricated at according time intervals for purposes of advantageous a accommodation or creating a fund. Absorption payments on bonds, premiums on insurance, payments on chapter purchases, and payments of hire are examples of annuity. The acquittal intervals for the acquittal of accomplishment may be of any length, but the best frequently acclimated are the annual, semi-annual, quarterly, and account acquittal intervals.
Simple accomplishment is an accomplishment whose acquittal breach is the aforementioned as the absorption period. There are annuities that are fixed, acceptation that the appellation starts and ends on audible dates. Account acquittal on chapter purchases are alleged accomplishment assertive back the acquittal starts on a audible date and abide consistently until the aftermost payment. There are three types of simple accomplishment namely: accustomed annuity, accomplishment due, and deferred annuity.
Ordinary accomplishment is one whose alternate payments are paid at the end of anniversary acquittal interval. The aboriginal acquittal in accustomed accomplishment is fabricated at the end of the aboriginal period. Accomplishment due, on the alternative duke is an accomplishment whose payments are due at the alpha of anniversary acquittal period. The aboriginal acquittal is due anon at the alpha of the aboriginal period. Lastly, deferred annuity’s aboriginal acquittal is deferred or postponed, and is to alpha at some approaching date.
Accidental accomplishment is one whose appellation depends on some ambiguous events. Many activity allowance behavior are examples of accidental annuity. The balance of activity allowance behavior frequently armamentarium annuities. Action holders of allowance or amusing aegis may be paid from the funds that were accustomed for their account on the deaths or alternative claims of alternative action owners.
Smith, J., Skousen, K.F., Stice, E., & Stice, J. (1998). Annuity. Intermediate accounting (p 248). South Western
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