2RQ - Horngren'S Financial And Managerial Accounting

Question

What is an amortization schedule?

Step-by-Step Solution

Answer

Amortization is a process by which thw amount of the liability is decreased with the help of regular payments.

Step 1: Definition of long-term liabilities

A liability that does not need to be paid within one year or within the entity’s operating cycle, whichever is longer.

Step 2: Meaning of amortization schedule

The amortization schedule is a schedule that provides details about the payment of the installment. It shows the portion of interest and principal in the installment.