ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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COMPOUND INTEREST PRINCIPLE Definition
COMPOUND INTEREST PRINCIPLE is where the interest is computed on principal plus interest earned in previous periods.
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APB 29 (Accounting Principles Board Opinion No. 29) Accounting for Non-monetary Transactions states that an exchange of non-monetary assets should be recorded at fair value. Certain modifications to that basic principle are contained in paragraphs 20-23 of APB No. 29. Paragraph 21(b) provides that accounting for an exchange of productive assets for similar productive assets should be based on the recorded amount of the non-monetary assets relinquished. However, Paragraph 4 of APB No. 29 states that Opinion is not applicable to business combinations.
MONETARY POLICY is U.S. Federal Reserve actions to influence the availability and cost of money and credit as a means of helping to promote high employment, economic growth, price stability and a sustainable pattern of international transactions. Tools of monetary policy include open market operations, adjustments in reserve requirements and changes in the discount rate.