Amortization of the Premium on Bonds Payable Is Subtracted from Net

question 61

Multiple Choice

Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because

• A) it is a financing cash outflow.
• B) it reduces income without causing a cash outflow.
• C) interest expense understates the cash paid for interest by the amount of the premium amortization.
• D) it increases income without causing a cash flow.

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Definitions:

Graduated And Reciprocated Initiatives

A strategy in conflict resolution where each party gradually reduces their antagonism in a step-by-step process.

Tension-Reduction

A psychological process where stress or tension is alleviated through various methods.

International Conflict

Disputes between countries, often involving military, economic, or diplomatic issues, that can escalate into war.

Conflict

A situation or issue characterized by a clash of opposing feelings, needs, or desires, often leading to tension or dispute.