FINANCIAL ACCOUNTING Definition

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FINANCIAL ACCOUNTING is the area of accounting concerned with reporting financial information to interested external parties.

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SPOT RATE is the price at which a currency can be purchased or sold and then delivered within two business days, e.g., spot dollar.

EFFECTIVE INTEREST RATE is the cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the note.

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