226

question 75

Multiple Choice

226. Which of the following statements regarding the effective-interest method of accounting for bonds characteristics is false?

• A) GAAP always requires use of the effective interest method.
• B) The amount of periodic interest expense decreases over the life of a discounted bond issue when the effective-interest method is used.
• C) Over the life of the bonds, the carrying value increases for discounted bonds when using the effective-interest method.
• D) The effective-interest method applies a constant percentage to the bond carrying value to compute interest expense.

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Definitions:

Transboundary Resource

Natural resources that cross or are located on the borders between countries, often leading to conflicts or the need for cooperative management agreements.

Developing Countries

Nations with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.

Environmental Sociology

A field of sociology that examines the interactions between societies and their natural environments, including the social causes and consequences of environmental problems.

Analytic Frameworks

Systematic structures used to dissect and understand complex issues or phenomena by breaking them down into their component parts.