Which Statement Is True

question 70

Multiple Choice

Which statement is true?

• A)The carrying amount of the bonds will increase each year if the bonds were issued at a discount.
• B)The carrying amount of the bonds will increase each year if the bonds were issued at a premium.
• C)Total interest expense will increase each year if the bonds are issued at a discount and the straight-line method of amortization is used.
• D)Total interest expense will increase each year if the bonds are issued at a premium and the effective interest method of amortization is used.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, which can lead to beneficial trade.

Specialize

The process by which individuals, firms, or countries concentrate their efforts on producing a limited variety of goods or services to gain efficiency and improve performance.

Domestic Surplus

The excess of a country's production over its domestic consumption, often leading to exports.

Domestic Shortage

A Domestic Shortage occurs when the quantity demanded of a good or service in a country exceeds the quantity supplied at the current market price, leading to scarcity.