The Amount of Amortized Bond Premium

question 31

Multiple Choice

The amount of amortized bond premium

• A)reduces interest expense on the income statement.
• B)is reported as a deduction from bonds payable on the balance sheet.
• C)is reported as an addition to bonds payable on the balance sheet.
• D)is added to the present value of bonds.

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Definitions:

Economic Profits

The extra amount businesses earn after subtracting all of their costs, including opportunity costs.

Long Run

A period in which all factors of production and costs are variable, allowing for all adjustments to be made within a market or economy.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on quality, brand, and price.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved, leading to a loss of total societal welfare.